State Bank of India (SBI), on Wednesday, raised ₹4,000 crore via Basel-compliant Additional Tier 1 (AT 1) bonds at a coupon rate of 7.72 per cent.
India’s largest bank, in a statement, said this is the first AT 1 bond issuance in the domestic market post the new SEBI regulations.
Lowest pricing
This is also the lowest pricing ever offered on such debt issued by any Indian bank since the implementation of Basel III capital rules in 2013, it added. SBI said investors placed bids in excess of ₹10,000 crore, against the base issue size of ₹1,000 crore.
Based on the investors’ response, the bank decided to accept ₹4,000 crore at a coupon of 7.72 per cent.
AT 1 instruments are perpetual in nature. However, they can be called back by the issuer after five years or any anniversary date thereafter.
While the bank has ‘AAA’ credit rating from local credit agencies, the AT1 offering is rated ‘AA+’, which is the highest rating in the country for these instruments, in view of the hybrid and high-risk nature of these instruments.