SBI Raises $1 Billion In Syndicated Loans

State Bank of India has tied up a $1-billion syndicated loan, the largest such transaction in recent years, through its GIFT City branch, according to Managing Director CS Setty.

Setty said the funds were raised through two tenures: a three-year loan and a five-year one. These funds were raised at 80 basis points and 100 basis points over the secured overnight financing rate or SOFR, respectively.

SOFR is a benchmark rate for dollar-denominated derivatives and loans, which replaced the London Interbank Offered Rate or Libor.

India's largest lender was originally intending to raise $250 million under each of the tenures, but revised it to $500 million after seeing the wide interest.

The loan is entirely underwritten by HSBC, Setty said. This is the largest sole underwritten loan by any Indian bank since at least 2018.

"There is an undeniable India growth story and SBI is a proxy for this story," said Hitendra Dave, chief executive officer at HSBC India. "It also shows in the large interest we have seen among the lenders we have approached to participate in the loan."

According to Dave, lenders across the Middle East, Europe and Asia have participated in the syndicated loan.

In February, SBI had raised $1 billion through a syndicated social loan facility. However, this loan was specifically focused on funding environmental, social and corporate governance assets.

The funds raised through the latest syndicated loan will be used to meet long-term loan growth and liabilities management. The transaction also points to the growing importance of the GIFT city branch, which has become a central feature of SBI's long-term fund raising needs, Setty said.

"This transaction shows the tremendous confidence in SBI's balance sheet among global financier," Setty said. "The pricing is the best available rate for such a large amount. It is also the largest single underwritten loan from India."

As of Sept. 30, SBI's gross advances rose 12.4% year-on-year to over Rs 34 lakh crore. Deposits for the lender were at nearly Rs 47 lakh crore, up 12% year-on-year. Net interest income in the second quarter rose over 12% to Rs 39,500 crore, while fee income was up 10% at Rs 6,536 crore.

Gross non-performing asset ratio was at 2.55%, while net NPA ratio fell to 0.64%.