Mumbai: State Bank, which has raised USD
2.9 billion so far under its Medium Term Notes (MTN)
programme, is likely to decide when to come with the next
phase of fund raising through MTN bond issuance in Q2 FY11, a
top official said.
The lender, which started raising money under the USD
five billion MTN programme in 2004 to finance its overseas
expansion plans, said the bank is unlikely to tap the MTN
route to raise funds till June this year.
At the earliest, we would look at raising further
money under the MTN programme by July, 2010. The details of
this exercise will be decided according to the prevailing
market conditions and bank's requirements," the official told
a news agency here.
Under its USD five billion MTN note programme, SBI has
already raised around USD 2.9 billion in various phases, which
has left the banking major with a headroom of USD 2.1 billion
to raise further funds through this route.
In October this year, SBI had raised USD 750 million
(about Rs 3,600 crore) issuing bonds, which carried a maturity
of five years at a coupon rate of 4.5 percent.
It raised an additional USD 100 million senior debt
via the issue of fixed rate bonds last month, which carried a
maturity period till 2014 and a coupon of 4.50 percent.
An MTN programme allows an issuer to raise funds on an
ongoing basis through various products such as floating rate
notes or on a fixed rate after obtaining prior regulatory and
other approvals.
The amount raised through the MTN programme will be
primarily used to fund the expansion plans of SBI's foreign
branches and to expand its overseas loan book, the official
said.
After SBI's October issue, its nearest competitor,
ICICI Bank had also raised USD 750 million late last year
through the issue of five-year bonds at its Bahrain branch.
The issue, which had an order book of over USD three
billion, was participated by over 250 investors and carried a
coupon rate of 5.5 percent.
SBI, which derives around 12 percent of its total
revenue from the overseas business, at present has 137
branches abroad.
PTI
First Published: Sunday, January 03, 2010, 13:12