State Bank of India has raised Rs 4,000 crore of the Basel- compliant Additional Tier 1 (AT1) bonds, it announced on September 1. The country’s largest lender raised the amount at a coupon rate of 7.72 percent.
Following the new SEBI regulations, this is the first AT1 Bond issuance in the domestic market. The issue garnered overwhelming response from investors with bids in excess of Rs 10,000 crore received against a base issue size of Rs 1,000 crore.
The public sector bank has now decided to accept Rs 4,000 crore at a coupon of 7.72 percent based on the response.
According to SBI, this is the lowest pricing ever offered on such debt, issued by any Indian bank since the implementation of Basel III capital rules in 2013.
As per norms, the AT 1 instrument is perpetual in nature. However, it can be called back by the issuer after five years or any anniversary date thereafter.
While SBI 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.
Earlier, the public sector bank raised the highest-ever NFO collection by any mutual fund scheme, through its SBI Balanced Advantage Fund (SBAF). The scheme has collected Rs 14,500 crore, which is more than what ICICI Prudential Flexicap Fund collected (Rs 9,500 crore) last month, which at the time, was the highest-ever NFO collection.
(With inputs from agencies)