State Bank of India (SBI) raised ₹3,717 crore through Basel III compliant Additional Tier-1 (AT-1) bond issuance at coupon rate of 8.25 per cent.
This is the third AT-1 bond issuance by India’s largest bank in the current financial year. The coupon rate represents a spread of 66 basis points over the corresponding FBIL G-Sec (Government Security) par curve on March 8, 2023.
The tenor of these bonds is perpetual with a call option after 10 years and every anniversary thereafter.
“The proceeds of bonds will be utilized in augmenting AT-1 capital and overall capital base of the bank and for strengthening capital adequacy in accordance with RBI guidelines,” according to a SBI statement.
The issue saw a total of 53 bids from provident and pension funds and insurance companies aggregating ₹4537 crore and was oversubscribed by about 2.27 times against the base issue of ₹2000 crore, it added.
Of its total outstanding of ₹49,842.70 crore under AT-1 bonds, the bank said Basel III AT-1 bonds with call option of 5 years amounted to ₹41,581.70 crore and AT-1 bonds with call option of 10 years amounted to ₹8261 crore.
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