SBI raises Rs 6,051 crore through Basel III Tier-2 bonds at 7.05% coupon

The State Bank of India (SBI) on Tuesday said it raised Rs 6,051 crore through the issuance of Basel III-compliant Tier-2 bonds, marking its second such fundraising in the current financial year.

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The bonds carry a coupon rate of 7.05% and a tenor of 10 years, with a call option after five years and on every anniversary thereafter. The issuance was rated AAA with a stable outlook by CRISIL Ratings Limited and India Ratings and Research Private Limited.

The issue saw strong participation from institutional investors. According to the bank, bids were approximately twice the base issue size of Rs 5,000 crore, with a total of 47 bids received. Investors included provident funds, pension funds, mutual funds, and banks.

SBI Chairman CS Setty said that wider participation and heterogeneity of bids demonstrated the trust investors place in the country's largest Bank. Following the response, the bank decided to accept Rs 6,051 crore at the coupon rate of 7.05%, payable annually.

The bonds have a tenor of 10 years and include a call option after five years and on each anniversary date thereafter.