The coupon rate – or the rate of interest paid to investors – was set at 8.34%, the country’s largest lender said. The securities, which are perpetual bonds, have a call option after 10 years and every anniversary thereafter.
SBI’s bond issuance received 108 bids worth ₹5,294 crore, translating into oversubscription of 2.65 times versus the base size of ₹2,000 crore. The bank exercised a greenshoe option worth ₹3,000 crore. “The tight pricing and the diverse investor base for an instrument which has its own challenges shows the trust investors place in the Bank,” said Dinesh Khara, chairman, SBI.
Investors were across mutual funds, provident and pension funds, banks and insurance companies, the bank said.
Globally, AT-1 bonds have repeatedly stoked controversy as these securities have features that sometimes permit their write-off even before equity, potentially triggering losses worth billions for investors. When Credit Suisse collapsed in March 2023, the episode wiped out $17 billion worth of such bonds. Our Bureau