ICICI Bank to raise $750m via off­shore 10-year bonds

The Pak Banker - - COMPANIES/BOSS -

MUM­BAI: In­dia's largest pri­vate sec­tor len­der ICICI Bank Ltd is look­ing to raise $750 mil­lion through a dol­lar bond is­sue un­der its medium-term note pro­gramme, ac­cord­ing to two bankers in the know of the de­vel­op­ment.

The len­der will is­sue 10-year bonds through its Dubai In­ter­na­tional Fi­nance Cen­tre (DIFC) branch, said one of the bankers cited above.

The ini­tial guid­ance on the coupon of the bonds has been set around 230 ba­sis points above the 10-year bench­mark US Trea­sury note, said the banker. "There is strong de­mand for the pa­per, as has been the in­di­ca­tion from Asia where the is­sue has opened," the banker added. The bonds are likely to be priced later Mon­day.

The bench­mark US trea­sury yield was trad­ing around 1.97% in Asia on Mon­day, while the price to buy pro­tec­tion against ICICI Bank's bond risk was trad­ing around 235 ba­sis points in the in­ter­na­tional credit de­fault swap mar­ket.

Stan­dard & Poor's has rated the bonds BBB-, in line with the coun­try's sov­er­eign rat­ing. The ar­rangers for the is­sue in­clude Bank of Amer­ica Mer­rill Lynch, Bar­clays, Citibank and HSBC. Bankers were also hope­ful that the re­cent S&P move to put bonds is­sued by In­dian banks through their Bahrain branches in "cred­it­watch with neg­a­tive im­pli­ca­tions" would not af­fect the ICICI Bank's lat­est is­sue.

On 17 Fe­bru­ary, S&P had placed bonds is­sued by Bahrain branches of ICICI Bank and HDFC Bank un­der cred­it­watch af­ter the rat­ing agency down­graded Bahrain's long-term sov­er­eign rat­ing BB with a sta­ble out­look. "The for­eign cur­rency rat­ing on the host sov­er­eign caps our view of the cred­it­wor­thi­ness of the bank branches. We aim to re­solve the Cred­it­Watch sta­tus within a few weeks, or, at the lat­est in the next three months," the rat­ing agency had said in its re­lease. Both the lenders tweaked the struc­ture of the Bahrain branch bonds af­ter the coun­try's credit rat­ing was low­ered.

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