ICICI Bank hits overseas debt market with benchmark issue

The largest private sector lender ICICI Bank today hit the overseas bond market with a benchmark 5.5-year issue at an initial pricing of 3.75 per cent over the US treasury.

This is the second debt raising by the city-based lender this year after it had raised SGD 225 million early January in a seven-year bond sale programme through its Dubai branch, offering a coupon of 3.65 per cent. The bond was sold denominated in Singapore dollars.

“We have launched a US dollar-denominated Reg S benchmark bond sale programme for ICICI Bank with an initial price guidance of 375 bps above the US treasury,” one of the merchant bankers told PTI.

A US dollar-denominated benchmark bond issue can be to the tune of $500 million and above, while a Singapore-marked could be of SGD 250 million and a Hong Kong sale could be HKD 300 million.

ICICI’s January issue was oversubscribed by over 13 times, which was lead-arranged by StanChart.

Last fiscal, ICICI had hit the market five times raising $1 billion in two instalments of $750 million and $250 million, respectively. The bank had also raised a 1 billion yuan bond earlier in 2012 apart from a 100 million Swiss franc bond.

Domestic corporates have been raising funds from the overseas bond market in an unprecedented manner following high interest rates in the country.

So far this calendar year, corporates such as Reliance, Bharti Airtel, ICICI Bank, HDFC Bank, Exim Bank, Tata Communications, Union Bank, among others, have lapped up over $13.5 billion through overseas bond issues between January and mid-May.

But since late May the appetite for overseas debt had almost evaporated as the cost of funds jumped in the overseas markets following the US Fed’s indication in late May to wind down its $85-billion monthly bond buying programme earlier than expected.