Axis Bank to raise $500 million via bonds with five-and-a-half-year maturity

MUMBAI: Axis Bank, the country’s third-largest private sector lender, is raising $500 million by selling bonds with five-and-a-half-year maturity. The bond is expected to be priced 195 basis points over the five-year US treasury, which was trading at about 1.58 per cent on Monday, said an executive of Standard Chartered Bank, a banker to the issue. One basis point is 0.01 percentage point. “It is a RegS /144A issue,” said the executive. “It is a $500-million bond issue and the book has been oversubscribed four times.”

Standard & Poor’s Ratings Services assigned ‘BBB-’ long-term issue rating to a proposed issue. The rating on the notes reflects the long-term counterparty credit rating on the bank.

“The proposed notes will constitute direct, unconditional, unsecured, and unsubordinated obligations of Axis Bank. They shall, at all times, rank at par among themselves and with all other unsecured obligations of the bank,” said the rating company.

Harihar Krishnamoorthy, head treasurer at FirstRand Bank, said, “It is to be seen if banks would swap the dollar funds raised overseas into rupee. Most of the issuers could keep the proceeds in dollar form to fund their overseas branches and Indian corporates to expand offshore.”

Recently, ICICI Bank raised about $600 million through Renminbi-denominated notes at a coupon of 4.2 per cent.