State Bank of India (SBI) announced on Wednesday, September 1, that it raised Rs 4,000 crore of Basel compliant additional tier 1 (AT1) bonds at a coupon rate of 7.72 per cent, in its first AT-1 bond issuance in the domestic market after the new regulations from SEBI.
In a statement, the country's largest lender said that issue attracted a huge response from investors with bids in excess of Rs 10,000 crore received against a base issue size of Rs 1,000 crore.
Based upon the response, the state-run lender decided to accept Rs. 4,000 crore at a coupon of 7.72 per cent, which is the lowest pricing ever offered on such debt, issued by any Indian bank since the implementation of the Basel III capital rules in 2013.
The AT-1 instrument is perpetual in nature, but it can be called back by the issuer after a period of five years or any anniversary date afterward. State Bank of India has a AAA credit rating from the local credit agencies, according to its statement. The bank state-owned bank's additional tier-1 offering is rated AA+, which is the highest rating in the country for such instruments, due to their hybrid and high-risk nature.
By the end of June 2021, SBI's had a deposit base of over Rs. 37 lakh crore with a CASA ratio of nearly 46 per cent and advances of more than Rs. 27 lakh crore. The bank has a market share of 34.77 per vent and around 31.11 per cent in the home loans and auto loans segment respectively
On Wednesday, shares of State Bank of India settled 0.87 per cent higher at Rs 429.70 apiece on the BSE. SBI opened on the BSE at Rs 426.95, registering an intra day high of Rs 432.50 and an intra day low of Rs 425.40, throughout the trading session today.
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