Yes Bank is planning its first overseas dollar-denominated bond issue since a contentious 2020 write-down, aiming to gauge international investor confidence amid its ongoing recovery from a regulatory-led bailout and previous market disputes.
Yes Bank is preparing to return to the international debt market with a proposed three-year, dollar-denominated bond sale, according to Bloomberg. If completed, it would be the lender’s first overseas debt issuance since it permanently wrote down its additional tier 1, or AT1, bonds in 2020, a move that remains one of the most contentious episodes of India’s banking rescue.
The proposed issue would be benchmark-sized, and the bank has lined up arrangers and is due to speak with fixed-income investors, Bloomberg reported, citing people familiar with the matter. The deal would test whether global investors are willing to back a lender that was once at the centre of a regulatory-led reconstruction and whose AT1 write-off prompted years of legal and market disputes.
The background to that dispute matters. In March 2020, India’s authorities stepped in to stabilise Yes Bank after governance failures and mounting bad loans, with State Bank of India leading the rescue. The administrator later defended the AT1 write-down as legally valid and necessary for the bank’s survival, while market commentary at the time warned the move could raise the risk premium investors demand for Indian hybrid securities, according to Standard & Poor’s.
Since then, Yes Bank has tried to repair its balance sheet and rebuild market confidence. Sumitomo Mitsui Financial Group’s banking arm bought about a 25% stake in 2025, becoming the largest shareholder, while Crisil Ratings upgraded the bank’s rupee infrastructure bonds and Basel III-compliant Tier 2 debt to AA+ in August from AA-, citing better earnings performance. But its dollar debt still sits below investment grade, with Moody’s assigning a Ba1 rating and S&P Global Ratings giving it BB+, according to Bloomberg.
The timing also fits a broader push by Indian lenders to raise money abroad. Banks in the country have sold a combined $5.27bn over the past two months after Reserve Bank of India measures in June aimed at encouraging capital inflows and supporting the rupee, NDTV Profit reported. For Yes Bank, the planned bond sale is not just a funding exercise; it is also a fresh market test of how far its turnaround has progressed since the 2020 crisis and the AT1 controversy that followed.
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