HDFC Bank Ltd. secured its tightest-ever spread on a dollar bond issue, showing strong investor demand for India's largest private lender despite recent governance concerns.
The lender on Tuesday priced the $750 million five-year bond at 90 basis points over comparable US Treasuries, according to a person familiar with the matter, who asked not to be identified. The pricing was also 30 basis points tighter than the initial guidance.
The new offering was the Mumbai-based lender's first since February 2024, when it raised $750 million via three- and five-year notes at a spread of 95 basis points and 108 basis points, respectively.
The issuance comes after recent measures by India's central bank to attract foreign capital, including a concessional swap facility for lenders and state-run firms. The facility helps banks to access lower-cost funding at a time when credit growth continues to outpace deposit mobilization.
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The robust demand for HDFC Bank's debt suggests investors are looking beyond the developments that brought the lender under the governance spotlight. In March, its part-time chairman resigned abruptly, citing ethical differences. A subsequent media report alleged that the bank had breached industry norms by offering higher interest rates to a state-owned company.
HDFC Bank denied any wrongdoing and appointed veteran banker Keki Mistry as interim chairman for three months. The Reserve Bank of India also publicly supported the lender, saying that it had found no material conduct or governance-related concerns. Even so, HDFC Bank's shares have tumbled 20% this year, compared with an 8% drop in India's benchmark NSE Nifty 50 Index.
BofA Securities, Citigroup, HSBC (B&D), J.P. Morgan, Mashreq, MUFG and Standard Chartered Bank were the joint global coordinators and joint lead managers for the issuance.
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(This story has not been edited by NDTV staff and is auto-generated from a syndicated feed.)
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