Millennium Post

SBI hits global debt markets, eyes $1 bn from dual issue

The nation's largest lender State Bank of India (SBI) has hit the overseas bond market with a dual tranche benchmark issue of 5-year and 10-year maturity to raise up to $1 billion.

According to one of the merchant bankers working on the issue, SBI on Thursday launched the roadshow in major global financial centres and will close the transaction later in the day.

The bank has given an initial pricing of 240 bps over the US treasury for the 5-year money and 265 bps over the treasury for the 10-year bond, said the merchant banker, who did not want to be quoted as the deal is yet to be closed.

The US treasury is trading at around 2.75 per cent. The bank could not be immediately contacted for comments.On Tuesday, Oil India had raised $1 billion from a similar dual tranche issue, making it the single largest dual tranche Reg S issue from the country, and the oil major's largest ever.

Meanwhile,  The Reserve Bank of India has asked banks with offices abroad to formulate a policy for overseas real-estate transactions.
The Reserve Bank said that it has come to its notice that some Indian banks have committed certain lapses while buying or selling real estate and taking or letting out property on lease or rentals in some places in foreign countries, it said in a notification released on Thursday.
‘To avoid such lapses in future, it is advised that boards of directors of banks should lay down policies and formulate detailed operational guidelines to protect the interests of their respective banks,’ the RBI said.

It asked banks to ensure that all real-estate and property transactions at overseas centres are undertaken as per the board-approved policy. The banks should comply with the Foreign Exchange Management Act, Banking Regulation   and other relevant Indian laws. ‘The policy should, inter alia, require the agreements for acquiring or letting out premises on rental/lease basis to incorporate a suitable exit clause,’ it said.
The Reserva Bank also said banks should comply with all applicable laws of the host country, city or locality while making such deals.
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