State Bank of India, the nation’s biggest lender, is set to reenter the public dollar bond market after nearly a year. Three merchant bankers indicated on Tuesday that the bank anticipates robust demand for its planned five-year issue. The bonds will be offered via the lender’s London branch, with initial price guidance around 120 basis points above U.S. Treasuries. This move follows the Reserve Bank of India’s June introduction of a swap facility that has lowered the cost of overseas borrowing for Indian banks. SBI aims to raise at least $500 million, though the final amount will depend on investor appetite. Marketing has started, and the sale is expected to conclude by the end of the week. One banker noted that the offering includes a sizable spread premium, with potential tightening of up to 30 basis points, and the size could reach $1 billion or more. Fitch Ratings assigned an expected BBB- rating to the proposed senior unsecured notes, which rank equally with other unsecured obligations. SBI had postponed a similar $1 billion public issue in June due to elevated costs after heavy issuance by Indian lenders but later secured $600 million privately. Other major banks including HDFC Bank, Axis Bank and ICICI Bank also issued dollar bonds in recent months.
