SBI raises Rs 10,000 crores via 15-year infrastructure bonds

SBI has raised Rs 10,000 crore by issuing 15-year infrastructure bonds with a 7.36 percent coupon rate to support projects in power, roads, etc.

The largest bank in the country has issued a total of Rs 49,718 crore in Long-Term Bonds.

Dinesh Khara- the chairman of SBI stated that this move will support the establishment of a long-term bond curve and motivate other banks to issue bonds with extended maturity periods.

The coupon rate of 7.36 indicates a 21- basis point spread over the corresponding government bond yield curve. The instrument has been assigned a AAA rating with a stable outlook. Earlier, in September 2023, a 15-year infrastructure bond was issued at a coupon rate of 7.49 per cent.

The issue was oversubscribed by about four times the base issue size of Rs 5,000 crore.  The total number of bids received was 143 indicating wider participation with heterogeneity of bids. 

The investors were across provident funds, pension funds, insurance companies, mutual funds, corporates, the bank said.

The bond proceeds will be used to improve long-term resources for financing infrastructure and affordable housing sectors.

The bank board has already given the green light for raising up to Rs 20,000 crore through long-term bonds during the current fiscal year.