SBI
SBI raises Rs 3,700 cr via AT-1 bonds
Mumbai: The country’s largest lender SBI has raised Rs 3,717 crores by issuing Additional Tier 1 (AT-1) bonds at a coupon rate of 8.25%.
The bonds have a perpetual tenor and a call option after 10 years, as well as annually thereafter.
In a press release, SBI announced that the offering received bids of Rs 4,537 crores, making it oversubscribed by about 2.27 times in comparison to the base issue of Rs 2,000 crores.
AT-1 bonds are a type of perpetual debt instrument that banks use to enhance their core equity base and meet Basel III regulations. These bonds were established as a result of the Basel accord after the worldwide financial crisis to safeguard depositors.
“We believe that this issuance may help in developing a long-term AT-1 bond curve and encourage banks to effectively manage their AT-1 capital,” the bank said in a release.
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