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ICICI raises $500 mn from global bond sale

By Religare

In the first major overseas fund raising by a domestic bank, top private sector lender ICICI Bank raised USD 500 million through a US dollar bond sale.

The offering was priced at 3.125 per cent and is part of the bank's USD 7.5 billion medium-term notes programme, merchant banking sources said.

With this, the domestic companies have so far raised USD 8 billion in international debt so far this calendar year, which is nearly 50 per cent down from the same period last year.


Reliance Industries leads the pack so far with USD 1.7 billion.

ICICI Bank's is the first international bond sale by a domestic bank this fiscal year and is also one of the cheapest issues in recent times, media reports said.

The bank could tighten the pricing by 20 bps to 1.60 per cent above the 5-year US treasury, which is trading at around 1.68 per cent now and fix the final coupon pricing at 3.125 per cent, they added.

With this issue, the bank has an outstanding of USD 5 billion under its USD 7.5 billion MTN programme. In the last fiscal, the bank had raised USD 750 million in two tranches.

"The five-year bond sale is part of the bank's USD 7.5-billion global medium-term note programme and will be carried out from its Dubai IFC branch. The bonds will be listed on the Singapore Exchange," global rating agency Moody's said in a note earlier in the day.

According to sources, Barclays, Bank of America Merrill Lynch, HSBC, JP Morgan Chase and StanChart were advisors to the issue.

None of these bankers were willing to speak on record as the issue was yet to be formally closed. The bank could not be reached for an official comment.

International rating agencies Standard & Poor's and Moody's Investors Service have rated the senior unsecured notes at BBB- and Baa3, respectively.

In a note issued from Singapore today, S&P said it has assigned BBB- long-term issue rating to the issue from ICICI Bank under the foreign currency BBB-/stable/A-3 ratings methodology.

Going forward, the overseas bond market may see some traction as firms like Power Finance Corporation having completed roadshows and are awaiting attractive pricing.

Sun Pharma was also reportedly planning to raise USD one billion in dollar debt. Last, Adani Ports and Special Economic Zone had raised USD 650 million in a 5-year money at 195 basis points over the US treasury.


"The BBB- rating on the notes reflects the long-term counterparty credit rating on the bank," S&P said, adding the proposed notes will constitute direct, unconditional, unsecured, and unsubordinated obligations of ICICI Bank.

In a note issued from Singapore, Moody's also assigned a Baa3 rating to the proposed issue.

Story first published: Thursday, August 6, 2015, 9:30 [IST]
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