IDBI Bank’s Dubai branch has raised $300 million through a dollar-denominated bond sale with a maturity of five-and-a-half years. This bond sale is part of the $5 billion medium-term-note programme under which IDBI bank had till date raised $3.1 billion, including the latest offering.

The latest issue—RegS bond sale-- received strong investor interest and was oversubscribed seven times, Manmohan Singh, Head of Debt Capital Markets, India & South East Asia, RBS, told BusinessLine.

RBS was one of the lead bankers to the issue which saw a pricing of 350 basis points over five-year US Treasury. This translates to a yield of 5.05 percent. 

Nearly 23 per cent of the investors came from Europe and the rest from Asia. 

Regulation S bonds are senior unsecured debt instruments sold to foreign investors in which US-based American investors cannot participate.

The offshore bonds sold in the latest offering were rated BB+ by S&P, Baa3 by Moody's and BBB- by Fitch. 

These bonds will be listed in Singapore stock exchange.

IDBI had previously sold offshore bonds in March last year when it raised about $ 500 million.  Domestic companies had been going slow in the last ten months in tapping overseas debt. This was mainly due to rising interest rates in the Western markets on the back of taper talk by the US Fed since May last year. 

Indian companies and banks which had raised overseas funds over the last ten months include HDFC Bank ($500 million in October 2013), ICICI Bank ($750 million in December 2013), Bank of Baroda ($750 million in January 2014) and Bharti Group.

srivats.kr@thehindu.co.in

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