New Delhi: State Bank of India (SBI) on Thursday said that it has raised Rs 3,717 crore at a coupon rate of 8.25 per cent through Additional Tier 1 bond issuance.
The tenor of the bonds is perpetual with a call option after 10 years and every anniversary thereafter.
The issue attracted an overwhelming response from investors with bids of Rs 4,537 crore and was oversubscribed by about 2.27 times against the base issue of Rs 2000 crore, a statement from the country’s largest lender said.
The proceeds of bonds will be utilized in augmenting Additional Tier 1 capital and the overall capital base of the bank and strengthening capital adequacy in accordance with RBI guidelines, the statement said.
“The issuance is also very significant as the bank has been able to successively diversify and raise long-term Additional Tier 1 capital with a call option after 10 years and this will help the bank in managing its capital adequacy effectively. Of the total outstanding of the Bank’s Additional Tier 1 Bonds is Rs. 49,842.70 crores, Basel III AT1 bonds with a call option of 5 years is Rs. 41,581.70 crores and AT1 bonds with a call option of 10 years is Rs 8261 crores,” the statement said.
“We believe that this issuance may help in developing a long-term Additional Tier 1 bond curve and encourage banks to effectively manage their Additional Tier 1 capital,” the statement added.
