SBI Raises Rs 10,000 Cr Tier 2 Bonds

State Bank of India (SBI) raised Rs 10,000 crores today at a coupon rate of 7.81 per cent through its first Basel III compliant Tier 2 Bond for the current financial year. The bonds are issued for a tenor of 15 years, with the first call option after 10 years.

The issue attracted an overwhelming response from the investors with bids of Rs 15,907 crores and was oversubscribed almost 4 times against the base issue size of Rs 4,000 crores with 98 bids.

Dinesh Khara, Chairman SBI expressed that “wider participation and heterogeneity of bids demonstrated the trust investors place in the country’s largest Bank.”

Based on the response, the Bank decided to accept Rs. 10,000 crores at a coupon rate of 7.81 per cent payable annually for a tenor of 15 years with a call option after 10 years and on anniversary dates thereafter. This is the first Tier 2 Bond issuance by the Bank in the current financial year. The Bank has been rated AAA with stable outlook from CRISIL and India Ratings & Research Private Limited for these instruments.