State Bank of India (SBI.BO), the country’s largest lender, is expected to launch the first tranche of its 100 billion rupees ($2.2 billion) retail bond issue with an interest rate of 9.95% for 15-year bonds to retail investors.
The bank will offer 10-year bonds for retail investors at 9.75% and for non-retail applicants at 9.30%. It will also offer interest of 9.45% on 15-year bonds to non-retail investors. In the first tranche, the bank will raise up to Rs 2,000 crore.
Chairman Omprakash Bhatt had said that these bonds will be issued in two variants, Series 1 and Series 2 having maturity of 10 and 15 years respectively, with a face value of Rs 10,000 each.
The bonds offer an interest of 9.25 per cent for 10 years and 9.5 per cent for 15 years. These bonds are not deposits of the bank and are not guaranteed or insured and they may not be used as collateral for any loan made by the bank or any of its subsidiaries or affiliates.
Bonds are different from fixed deposits and are not covered by deposit insurance, he added. Since last July, SBI has also hit the overseas markets thrice with bonds, the latest being the first issue in Swiss francs (325 million or Rs 1,500 crore) early this week; a 750 million euro issue in October and a USD 1 billion issue in July.