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State Bank of India, on Thursday, said it has concluded its standalone issuance of fixed rate senior unsecured notes, aggregating $1.25 billion, under the so-called rule 144A/Regulation-S in two tranches.
The first tranche of five-year notes, aggregating $850 million, carry a coupon of 4.375 per cent, and the second tranche of three-year notes, aggregating $400 million, carry a coupon of 4 per cent payable semi-annually.
The bonds will be issued through the London branch of India’s largest bank as of January 24, 2019, and will be listed on the Singapore Stock Exchange and India International Exchange, GIFT City.
Fitch Ratings, on Wednesday, had assigned an expecting rating (BBB-) to SBI’s senior unsecured notes.
‘BBB’ rating indicates that expectations of default risk are currently low. The capacity for payment of financial commitments is considered adequate, but adverse business, or economic conditions, are more likely to impair this capacity.
The credit rating agency said these notes constitute SBI’s direct, unconditional, unsubordinated and unsecured obligations, and will, at all times, rank pari passu among themselves and with all of the bank’s other unsubordinated and unsecured obligations.
The senior unsecured instruments are rated at the same level as the bank’s Issuer Default Rating (IDR), in accordance with Fitch’s criteria.
IDRs opine on an entity’s relative vulnerability to default (including by way of a distressed debt exchange) on financial obligations.
“SBI’s IDR is driven by its Support Rating Floor of BBB-…The Support Rating Floor reflects Fitch’s expectation of a very high probability of extraordinary support from the India sovereign (BBB-/Stable), if needed, in light of the bank’s very high systemic importance and quasi-sovereign status,” said Fitch.
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