Key Points of SBI 3rd AT1 Bond Sale:
- SBI has successfully raised Rs 3,717 crore through its third Basel III compliant Additional Tier 1 bond issuance in the current financial year.
- The issue was oversubscribed by about 2.27 times against the base issue of Rs 2,000 crore, with bids worth Rs 4,537 crore received from 53 investors across provident and pension funds and insurance companies.
- The coupon rate of the bonds is 8.25 per cent, and the tenor is perpetual with a call option after 10 years and every anniversary thereafter.
- SBI plans to utilise the proceeds of the bond issuance to augment Additional Tier 1 Capital and overall capital base of the Bank and for strengthening capital adequacy in accordance with RBI guidelines.
- The success of this issuance is significant as SBI has been able to diversify and raise long-term Additional Tier 1 capital, which will help the bank manage its capital adequacy effectively.
- Prior to this issuance, the Bank had raised Additional Tier 1 Bonds of Rs 4,544 crore on 21st February 2023 at a spread of 71 bps over the corresponding FBIL G-Sec par curve on the date of bidding.
- The total outstanding of SBI’s Additional Tier 1 Bonds is Rs 49,842.70 crore, with Basel III AT1 bonds with a call option of 5 years at Rs 41,581.70 crore and AT1 bonds with a call option of 10 years at Rs 8,261 crore.
- This move by SBI highlights the importance of raising long-term capital to strengthen capital adequacy and comply with regulatory guidelines in the banking sector.
Details of SBI 3rd AT1 Bond Sale:
SBI has raised Rs 3,717 crore through its third Basel III compliant Additional Tier 1 bond issuance in the current financial year at coupon rate of 8.25 per cent.
More About this Development:
SBI said the issue attracted 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 2,000 crore. The total number of bids were 53 indicating wider participation. The investors were across provident and pension funds and insurance companies.
This issuance is also very significant as SBI 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.
Significance of This move:
The country’s largest lender says that the proceeds of bonds will be utilised in augmenting Additional Tier 1 Capital and overall capital base of the Bank and for strengthening capital adequacy in accordance with RBI Guidelines. The tenor of these bonds is perpetual with a call option after 10 years and every anniversary thereafter.
SBI’s Earlier Experience:
Prior to this, the Bank had raised Additional Tier 1 Bonds of Rs 4,544 crore on 21st February 2023 at a spread of 71 bps over the corresponding FBIL G-Sec par curve on the date of bidding.
SBI said of the total outstanding of Bank’s Additional Tier 1 Bonds is Rs 49,842.70 crore, Basel III AT1 bonds with call option of 5 years is Rs 41,581.70 crore and AT1 bonds with call option of 10 years is Rs 8,261 crore.
About SBI:
State Bank of India is a Fortune 500 company. It is an Indian Multinational, Public Sector banking and financial services statutory body headquartered in Mumbai. It is the largest and oldest bank in India with over 200 years of history.
For More Latest News Click Here
