State Bank to raise $1bn through bond issue in October

India's largest lender, State Bank of India (SBI) is set to raise upto $1bn from the international market this month through the issue of five year maturity bonds.

India's largest lender, State Bank of India (SBI) is set to raise upto $1bn from the international market this month through the issue of five year maturity bonds.

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This will fill up the immediate fund-requirement of the banking behemoth to fuel its expansion plans in key-overseas markets, primarily setting up of around 40 new offices and expanding the lending book.

The bond issue, a part of SBI's $5 billion Medium Term Notes (MTN) programme launched in 2004, will target investors including banks, insurance companies, hedge funds and private equities in the global market, a senior SBI official told PTI here.

State Bank of India has designed the bond issue through Reg-S route, which means it can target only non-US clients through the bond issue to raise a maximum of $1 billion.

The bank plans to launch international roadshows for the programme in the next few weeks and has appointed five leading investment banks -- Barclays, JP Morgan, Citi, HSBC and UBS as lead arrangers, the official said.

However, the official declined to give details of interest rate at which SBI would issue bonds to global investors.