SBI Raises Rs 7,500 Crore in Tier-2 Bonds at 6.93% as Softer Yields Draw Demand

Overview

• The 10-year Basel III-compliant securities carry a call option after five years and on each anniversary thereafter.
• The sale drew bids about three times the Rs 5,000 crore base issue, prompting use of the Rs 2,500 crore green-shoe.
• SBI received 101 bids from provident and pension funds, mutual funds and banks, which the chairman said reflected investor trust.
• Dealers said the 6.93% cut-off undercut the 6.95–7.00% range they expected as G-Sec yields eased with rate-cut expectations.
• On the same day, Nabard raised Rs 6,825.5 crore at a 6.71% cut-off, and dealers said such pricing could spur more bank issuance.