Four Indian private banks eye dollar debt before RBI swap window deadline, bankers say

Four Indian private lenders have fast-tracked plans to raise dollar bonds before the end of August, seeking to take advantage of a central bank swap facility before its early closure, after larger peers ICICI Bank and Axis Bank raised more than $1 billion.

Kotak Mahindra Bank, YES Bank, IDFC First Bank and Federal Bank are ‌together aiming to ⁠raise $1.85 billion ⁠through bond sales with maturities of up to five years, the bankers added.

Lenders are rushing ​to raise funds after the Reserve Bank of India last week said it would close ​a swap facility for FX deposits from non-resident Indians on August 31, a month earlier than planned.


Kotak Bank is leading the race as it has ​set its final price guidance at 108 basis ⁠points above ‌U.S. Treasuries, 22 bps narrower than its initial guidance.

"Kotak Bank ​should be ​finalised before the end of this week, leaving the other ⁠three lenders scrambling for funds in the last week of ​August," one of the bankers said.

They all requested ​anonymity as they are not authorised to speak to the media. None of the banks responded to Reuters emails seeking comment.

YES Bank has appointed merchant bankers for a three-year bond offering, with investor calls scheduled for this week, the bankers said.

This will be the first time the private financier taps ‌the offshore market after defaulting on its perpetual additional tier-1 bonds in 2020.

Federal Bank and IDFC First Bank, which are relatively smaller ​and are ​looking to debut in ⁠the dollar bond market, have just started scouting the market for investors, the bankers added.

The development comes after ICICI Bank raised $750 million through five-year bonds, 105 bps ​above Treasuries, while Axis Bank raised $300 million through three-year and three-month dollar bonds at a spread of 95 bps over Treasuries.

Indian banks have collectively raised $6.3 billion since the scheme was implemented on June 5, up from $850 million earlier this year, data from Cbonds showed, notching a record high for any calendar year.