SBI Raises Rs 7,500 Crore Via Second Tranche Of Tier-II Bond At 7.33%

State Bank of India bagged Rs 7,500 crore through its second tranche of tier-II bonds at a coupon of 7.33% on Wednesday, people familiar with the matter told NDTV Profit.

The 15-year bond issue, which had a base size of Rs 4,000 crore and a greenshoe option of Rs 3,500 crore, was fully subscribed.

According to the bid book accessed by NDTV Profit, SBI's tier-II bonds received 77 bids worth Rs 12,415 crore in the range of 7.30-7.48% coupon.

"The investors were across provident funds, pension funds, mutual funds, banks etc." the lender said in an exchange filing.

The tier-II bonds carry a call option on the tenth anniversary from the allotment date.

These bonds, rated AAA by CRISIL Ratings, will be allotted on Thursday.

This issuance has come as SBI last month, raised Rs 7,500 crore through Tier-II bonds maturing in 15 years at 7.42%. It was fully subscribed.

Tier-II bonds are part of a bank's borrowing mix, with less risk than tier-I bonds in the event of a default. Tier-II bonds are considered subordinated debt because they do not have the first claim on assets in the event of bank liquidation.

This is said to have been the state-owned bank’s last tier-II bond issue of the current financial year. So far this year, SBI has raised Rs 20,000 crore through two tranches of infrastructure bonds.

The bank is yet to tap the debt market with a tier-I bond issue, which may come in the October-December quarter, the people quoted above said.