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

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.