UBI raises $350 million through bond sale
   
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UBI raises $350 million through bond sale

Last Updated: Tuesday, April 23, 2013, 14:56
 
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UBI raises $350 million through bond sale
Mumbai: State-run Union Bank of India (UBI) has fallen short of its overseas bond sale target, managing only USD 350 million, merchant bankers said.

The city-headquartered bank had hit the street to raise a "benchmark issue" or an issue with a size of USD 500 million or more, but garnered only USD 350 million, they said.

It raised the money in 5.5 year REG S (unsecured senior bonds), priced at 3 per cent over the US treasury rate and have a coupon rate of 3.625 per cent, Standarad Chartered's managing director for debt capital markets, Jhujar Singh told the agency.

After a series of successes for Indian bond issues, including that of the largest lender SBI, UBI had hit leading Asian and European finance centres with an offering last week and was hoping to close the issue within the week.

However, it had to embark on a fresh set of roadshows before closing the issue, Singh said.

It can be noted that SBI had set a new benchmark earlier this month in bond pricing by selling USD 1 billion worth fixed rate five-year senior unsecured bonds.

So far, 11 companies through 13 issuances raised a whopping USD 7.5 billion this year, as rupee funds remain too costly at around 12-14 percent, as against foreign funds which are much lower.

The highest pricing of these debts is just under 6 percent, while the lowest coupon rate is the 3 percent HDFC Bank is paying to its investors for the USD 500 million issue sold in January.

PTI



First Published: Tuesday, April 23, 2013, 14:54


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