SBI files papers with SEBI to raise Rs 1,000 cr through bonds

Bonds issuance aggregating to Rs 500 crore with an option to retain over subscription up to Rs 500 crore, aggregating to Rs 1,000 crore, SBI said in a draft prospectus filed with SEBI.
The bank intends to deploy the proceeds to augment its capital base in line with its growth strategy, it said.

This is the first time when bonds are being issued by a bank for retail investors wherein the minimum application amount is Rs 10,000.

However, the coupon rate and mode of interest payment would be decided later. Lower Tier II bonds would have maturity of 10 years which Upper Tier II bonds would have tenor of 15 years.

The bonds are not deposits of the bank and are not guaranteed or insured and they may not be used as collateral for any loan made by the bank or any of its subsidiaries or affiliates, SBI said.

Bonds are different from fixed deposits and are not covered by deposit insurance, it added.
In July this year, SBI raised USD 1 billion (about Rs 4,700 crore) through an issue of bonds to qualified institutional buyers.

State Bank of India, acting through its London Branch, successfully priced an offering of USD one billion of senior unsecured bonds due 2015.

SBI's debut issuance allows it to broaden its debt investor base and to access large, highly capitalised US institutional investors in the private placement market.
The offering was priced at a coupon rate of 4.50 per cent per annum.
In terms of allocations, US-based investors received 55 per cent of the allocation while Asian investors were allocated 28 per cent and the balance 17 per cent across European investors.

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