SBI raises Rs3,000 crore through tier-II bonds
The country's largest lender State Bank of India (SBI) has raised Rs.3,000 crore through tier-II bonds, the bank said in an exchange filing on Friday.
SBI has priced its 10-year bonds at a yield of 8.45%. These bonds have a call option at the end of the fifth year under which the lender has the option to call back its bonds from investors and repay them ahead of the tenure if it wishes to.
On 11 February, SBI chairman Arundhati Bhattacharya had said that the bank would raise tier-II capital during the fourth quarter of the fiscal year.
Public sector lenders have been raising capital from the bond market through tier-ii and tier-I bonds and such issuances have risen since October.
Investors, however, gave a cold shoulder to some of the bank bond issuances, especially low-rated ones. Lenders such as Bank of India had to defer their issues at least once before successfully raising money. Some such as Dena Bank tapped unusual sources such as Power Finance Corp. to place their bonds and get funds.