HDFC Bank Raises $1 Billion From AT-1 Bond Issue, Pricing At 3.7%

The country's largest private lender - HDFC Bank launched its $1 billion additional tier-I (AT-1) bond issue in the overseas market on August 18 and was also able to close the final pricing at a level substantially lower than the initial guidance, according to a statement shared by the bank. HDFC Bank said that the dollar-denominated, Basel III-compliant AT1 notes were priced at 3.70 per cent - which is 42.5 bps lower than the initial price guidance. 

The issuance is given a provisional rating of Ba3 by Moody's Rating Services of the leading bond credit rating company - Moody's Investors Services. HDFC Bank added that this is one of the tightest pricing achieved by any bank from Asia with a Ba3 rating and also the largest US$ AT1 offering by any bank from India.

The bank's offering was well received by the global investors and was oversubscribed by over three times after the final price guidance was released. The said AT-1 notes will be listed on The India International Exchange (IFSC) Limited, according to HDFC Bank's statement.

'We believe that this successful issuance will set the road for other Indian players looking to raise AT1 bonds in the overseas markets. We are confident that the recovery in the Indian economy will pick up pace, with falling caseloads and increased vaccination coverage,” said Mr. Ashish Parthasarthy, Treasurer, HDFC Bank.

Meanwhile, the Reserve Bank of India (RBI) relaxed restrictions placed on HDFC Bank last year over the issuance of new credit cards, following outages in the bank's digital payment services.

On Wednesday, August 18, shares of HDFC Bank settled 0.13 per cent lower at Rs 1,512.90 apiece on the BSE.