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Union Bank of India

Union Bank raises $350M through sale of overseas bonds

16 August, 2012

Union Bank of India has sold five-year dollar bonds raising $ 350 million at a spread of about 390 basis points more than similar-maturity Treasuries, said a banker involved in the deal, while according to media reports ICICI Bank and Syndicate Bank are planning to follow suit.

The lender, who was expecting to raise money up to $ 500 million, completed the sale of $350 million of bonds on Wednesday. The five-year bond carries a coupon rate of 4.625% and HSBC, Barclays Plc, Citigroup Inc, Deutsche Bank AG, Standard Chartered Plc and UBS AG were the arrangers for the deal.

Banks like State Bank of India, IDBI Bank pulled a sale of bonds denominated in dollars late last month as market conditions improved, said a merchant banker. He added that the fall in rupee, which breached 57 level against the dollar last month, has affected bond sales of banks like Indian Overseas Bank (IOB) and the plans of ICICI Bank.

Indian Overseas Bank (IOB) recently raised $ 500 million as second and final tranche, by way of senior unsecured bonds, under medium term note (MTN) programme of $1 billion through the Hong Kong branch, while last month State Bank of India successfully raised $1.25 billion at 3.75% over the US treasury rate. The success of the two banks boosted plans of ICICI overseas bond sale.

According to media reports, ICICI Bank is looking to raise $750 million through unsecured notes with a five-and-a-half year maturity period and will be listed on the Singapore Stock Exchange. The bank will issue the notes through its Dubai branch and has given a pricing guidance of 405-425 basis points above US treasury notes for the bonds.

(Edited by Prem Udayabhanu)


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Union Bank raises $350M through sale of overseas bonds

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