ICICI Bank has raised S$ 225 million from a seven-year bond sale programme through its Dubai branch at a coupon rate of 3.65 per cent.
“We have successfully raised S$ 225 million through our Dubai branch yesterday at a coupon rate of 3.65 per cent. Significantly, the seven-year bond will also yield 3.65 per cent,” a bank spokesperson said here today.
The bank had given an initial price guidance of 4 per cent while the final pricing saw of tightening of 0.35 per cent. The issue was oversubscribed by over 13 times to S$ 3 billion, the lead banker to the issue StanChart said.
This is the fifth debt raising by the private sector bank this fiscal with it earlier in the year raising $1 billion in two instalments of $750 million and $250 million. The bank had also raised a 1 billion yuan bond earlier in the year apart from a 100 million Swiss franc bond.
StanChart, HSBC and ANZ were the lead managers to the issue, which was closed yesterday.
This was the second issue in 2013, with Exim Bank on January 8 raising $750 million through a European bond sale, which was overbought by 8.5 times at a 4 per cent coupon.
“ICICI’s new issue has established a new benchmark for them in the Singapore-dollar-denominated bond market. It has also helped them achieve investor diversification, raise seven-year pricing tighter than the USD curve, and establish a benchmark for them in the S$ (SGD) bond market,” Jujhar Singh, Managing Director – Capital Markets, StanChart India said from London.
It’s heartening to see an Indian issuer pricing 2013’s first SGD issue so tight, he added.
Singh further said the issue, despite having a seven-year tenor is dearer by only 0.02 per cent as the bank’s existing dollar bond maturing by 2018 is priced at 3.63 per cent.
The pricing has also been helped by the timing as it came soon after the resolution of the US fiscal cliff apart from the fact that the traders are flushed with cash after the Christmas and New Year holidays, said Singh.
On the tenor extension by two years, he said, ICICI Bank wanted to diversify its investor profile. Also, generally insurers want longer tenor and the bank has quite a few insurers in its investor kitty in Singapore.
As much as 36 per cent of the 102 investors were insurers followed by 31 per cent HNIs of private banks, 17 per cent of fund houses and 16 per cent constituted international banks, Singh said.
Majority of these investors are from Singapore (78 per cent) 19 per cent from Greater China and 3 per cent from Europe.
On the rationale for the huge demand for Indian debt, Singh said since September there has been a substantial improvement in sentiment about the Indian growth as since then the sovereign downgrade threat has eased.
S$, SGD: Singapore dollar