“It (SBI) is likely to conduct a Tier 2 bond sale for up to ₹7,500 crore with a base size of ₹3,500-4,000 crore and the rest through call option. The bidding for the bond sale is likely to be held on September 18 and payment would be made on September 19,” a source privy to the developments told ET.
An email sent to SBI seeking comment on the matter remained unanswered till the time of publication. The funds would likely be used to meet regulatory requirements and boost business growth, the sources said.
Sources said the bank would likely consider a coupon rate (or interest rate paid to investors) of around 7.40 per cent for the upcoming Tier 2 bond sale. On August 28, SBI had raised ₹7,500 crore by issuing 15-year Tier 2 bonds at a coupon rate of 7.42 per cent.
Typically, SBI Bonds SBI bonds have the lowest coupons among debt instruments issued by banks as investors consider them particularly safe given its status as the country’s largest bank and its state ownership.
Sources said next week’s bond sale would likely mark the last tier 2 issuance by SBI for the current year. Financial year“The bank is unlikely to undertake further infrastructure or level 2 projects.” Bond sale in Fiscal year 25“They have received approval to raise funds worth Rs 25,000 crore through Tier 2 and Tier 1 bonds. That leaves room to issue around Rs 10,000 crore of additional Tier 1 (AT-1) bonds,” another source said.
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