Now Reading: SBI raises ₹4,691 crore via AT1 bonds at 7.75%
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SBI raises ₹4,691 crore via AT1 bonds at 7.75%
State Bank of India (SBI) has raised ₹4,691 crore through its first Basel III compliant Additional Tier 1 (AT1) bond issuance this financial year. The perpetual bonds carry a coupon rate of…
The Story in Brief
State Bank of India (SBI) has raised ₹4,691 crore through its first Basel III compliant Additional Tier 1 (AT1) bond issuance this financial year. The perpetual bonds carry a coupon rate of 7.75% with a call option after five years and are rated AA+ with stable outlook by CRISIL and CARE.
The issue drew bids of more than two times the base size of ₹3,000 crore, with 89 bids from provident funds, pension funds, mutual funds, and banks. SBI Chairman C.S. Setty said the strong response reflected investor confidence in India’s largest lender. The AT1 bonds will help fund the bank’s growth strategy while meeting regulatory capital norms.
The Indian Opinion
The overwhelming demand for SBI’s AT1 bonds is being hailed as a vote of confidence in public sector banks. But these instruments carry loss-absorbency features that can wipe out investors during stress. Retail investors drawn by the 7.75% coupon may not fully grasp the risk. The real benchmark will be how SBI’s capital adequacy holds up as credit growth accelerates and non-performing assets emerge.
Source: thehindu.com
This story was synthesised by AI from the source linked above.
