Bank of Baroda raises $700 million through overseas bond issuance

Bank of Baroda has raised $700 million through a dual-tranche overseas bond issuance, comprising three-year and five-year senior unsecured fixed-rate notes under its $4 billion Medium-Term Note Programme.

The bonds were issued through the bank’s International Financial Services Centre Banking Unit at GIFT City and received strong demand from international investors. The order book peaked at $2.67 billion, representing demand of nearly 3.8 times the final issue size.

The bank raised $400 million through the three-year tranche at a coupon of 5.114% per annum, equivalent to a spread of 90 basis points over the three-year US Treasury rate.

The remaining $300 million was raised through the five-year tranche at a coupon of 5.318% per annum, representing a spread of 100 basis points over the five-year US Treasury rate.

Strong investor demand allowed Bank of Baroda to significantly tighten pricing from its initial pricing guidance. The three-year tranche was initially offered at a spread of 120 basis points over the three-year US Treasury, while the five-year tranche had an initial guidance of 130 basis points over the five-year US Treasury.

According to the bank, the transaction resulted in its tightest-ever spread over the US Treasury in the history of its bond issuances.

“The exceptionally strong investor response to our USD 700 million bond issuance reflects deep market confidence in the Bank, its financial resilience and clear strategic direction,” Dr Debadatta Chand, Managing Director & CEO, Bank of Baroda, said.

“The competitive pricing achieved, coupled with strong participation from high-quality international investors, reinforces our ability to efficiently diversify our funding base and support our long-term growth priorities,” he added.

The bonds have been rated BBB (Stable) by S&P, BBB- (Stable) by Fitch and BBB+ (Stable) by CareEdge Global.

The notes will be listed on the India International Exchange (IFSC) Limited (India INX), NSE International Exchange (NSE-IX) and Singapore Exchange (SGX-ST).

The bonds are scheduled to settle on August 20, 2026. The three-year notes will mature in August 2029, while the five-year notes will mature in August 2031.

The successful overseas fundraising provides Bank of Baroda with an additional source of foreign-currency funding while diversifying its overall funding base.