Mumbai: The State Bank of India (SBI) has collected RS 4,000 Crore Tier-1 Bonds (AT1) additional, offering a 7.72% coupon level.
This approaches the HDFC bank heel collecting $ 1 billion through the AT1 bond edik on the international market.
Meanwhile, AXIS Bank has knocked on the international market to improve AT1 bonds.
Some other public sector banks are looking at bond issuance – both locally and in the international market – take a good response to new problems.
According to bankers, there are fresh interests for AT1 bonds because this offer is a higher level of return and results very low in the debt market.
Public sector bonds are seen as low-risk investments because of government ownership.
SBI bonds receive offers more than Rs 10,000 Crore, which is almost 10 times the basic size of Rs 1,000 Crore.
“Based on his response, the Bank has decided to receive Rs 4,000 Crore at 7.72% coupon,” the largest bank said in the country.
Returns of these bonds is higher than conventional debt instruments because AT1 is seen as an instrument similar to equity because it is at risk.
The price of SBI is the lowest ever offered at the debt issued by Bank India since the implementation of Basel III capital rules in 2013, the bank said.
While banks have AAA credit rating from local credit agents, AT1 offers assessed AA +, which is the highest ranking in this country for this instrument given the hybrid and high risk, their bank said.