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The State Bank of India (SBI) on Thursday raised ₹5,000 crore through its second Basel III-compliant Additional Tier (AT) 1 bond issuance for the current financial year at a coupon rate of 8.34 per cent.
The coupon rate on the latest AT-1 bond issuance is 24 basis points higher than the last issuance. India’s largest bank had raised ₹3,101 crore via AT-1 bonds in July 2023 at 8.10 per cent.
The tenor of AT-1 bonds is perpetual, with a call option after 10 years and every anniversary thereafter.
The issue was oversubscribed by about 2.65 times against the base issue size of ₹2,000 crore, the bank said in a statement.
Overall, investors — mutual funds, provident and pension funds, banks, insurance companies, etc. — put in 108 bids, aggregating ₹5,294 crore.
Dinesh Kumar Khara, Chairman SBI, said: “The tight pricing and the diverse investor base for an instrument that has its own challenges show the trust investors place in the bank.”
The issuance is significant as the bank has been able to diversify and raise long-term non-equity regulatory capital, per the statement.
The bonds were rated “AA+” with a stable outlook by Crisil and ICRA.
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