Bank of Baroda and ICICI Bank lead a surge in Indian bank dollar funding, issuing multi-million dollar bonds to secure longer-term foreign currency financing as demand from international investors strengthens.
Bank of Baroda has wrapped up a $700 million offshore bond sale, adding to a wave of Indian bank dollar funding that has been gathering pace as lenders tap overseas investors for longer-dated money. The Hindu BusinessLine reported that the state-owned bank sold senior unsecured fixed-rate notes with three-year and five-year maturities under Regulation S, raising $400 million at 5.114% and another $300 million at 5.318%. The notes are due to be issued through its IFSC Banking Unit branch on August 20 and will be listed on the Singapore Stock Exchange, India INX and NSE IFSC at GIFT City.
The transaction comes as Indian banks look to lock in foreign-currency funding while demand remains healthy. Bank of Baroda’s issue was framed against a backdrop of large lenders offering leverage to non-resident Indians to place fresh foreign currency non-resident bank deposits of three to five years under the Reserve Bank of India’s limited-period concessional swap facility, according to the report.
ICICI Bank has also been active in the dollar market. Business Standard reported that the private-sector lender raised $1 billion through a five-year senior unsecured US dollar bond, its first public dollar bond sale since 2017, with the notes priced at a 5.46% coupon and at a spread of 100 basis points over the five-year US Treasury yield. The deal drew more than $2.3 billion of orders, and HSBC acted as joint global coordinator and joint bookrunner. In a separate filing cited by The Hindu BusinessLine, ICICI said its IFSC Banking Unit had completed a $300 million senior unsecured fixed-rate note issue under its $7.5 billion global medium-term note programme, with the securities to be listed on the Global Securities Market of India International Exchange IFSC and the Debt Securities Market of NSE IFSC.
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