HDFC Bank to raise $500 mn from overseas markets

Last Updated: Wednesday, February 27, 2013 - 22:06

Mumbai: Country's second largest private lender HDFC Bank on Wednesday hit the foreign debt markets with a USD 500-million bond issue, according to merchant banking sources.

"HDFC Bank is raising USD 500 million through a five- year US dollar denominated bonds (senior unsecured notes). The final pricing guidance has been fixed at 235 basis points (2.35 percent) above the US treasury," a merchant banking source, who did not wish to be identified, told PTI here.

The bank had on Monday launched a road-show in Hong Kong, Singapore and London for this, the source added.

Meanwhile, global rating agency Standard & Poor's said it has given a BBB- rating to the HDFC Bank senior unsecured notes.

It can be noted that 2013 saw many large corporates like Reliance Industries, ICICI Bank, Exim Bank, PowerGrid, Tata Communications, raising foreign debt.

While on January 7 this year, Exim Bank had raised USD 750 million in a European bond sale at the cheaper ever rate of 4 percent for a 10-year money, which got an over-subscription of 8.5 times, within a week, the state-run distribution utility PowerGrid had raised USD 500 million at 3.87 percent for a 10-year USD issue which received an over-subscription of 19 times.

In the same week, the largest private lender ICICI Bank mopped USD 225 million from a seven-year Singapore bond sale programme on January 10.

The last week of January saw Reliance Industries hitting the market with a USD 800 million perpetual bond issue, the first by a domestic company.

The last week of the past month also saw Tata Communications becoming the first domestic un-rated corporate to tap overseas financial markets by selling bonds worth 250 million Singaporean dollars at a coupon of 4.25 percent, which got an over-subscription of 14 times the offer.

This makes the overall fund raising by leading domestic corporates USD 2.525 billion this year so far.

Last Monday, the largest telco Bharti Airtel had hit the overseas market with a road-show to mop up USD 1 billion.

Interestingly more and more domestic companies are raising funds from Asia as investors in the region have high regard for Indian debt, say merchant banking sources. Last year, domestic corporates had raised USD 8.15 billion from Asian markets, while the rest of Asia mopped up a record debt of over USD 208 billion through 353 deals.

Also more domestic borrowers are expected to access overseas markets for their funding needs as the rupee funds are still a costly affair.


First Published: Wednesday, February 27, 2013 - 22:06

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