ICICI Bank raises 500 million Yuan bond at 4.66 per cent

MUMBAI: ICICI Bank, country's second largest bank has raised 500 million, 2015 Yuan demoninated bonds at a coupon of 4.66 per cent. The bond issue is a re-opening of its 4.9 per cent September 2015 yuan-denominated bonds, taking the bond size to one billion.

"The bank is tapping an issue of 500 million Yuan and it would be merged with the earlier issue," said Jujhar Singh, MD and Head of Debt Capital Market South Asia, Standard Chartered Bank.

The issue is priced 35 basis point tighter than the spread on the secondary market bond. "The bank saves on interest cost. The Yuan bond will help the bank establish more liquidity and diversify investor base to target CNH investors", he said.

"After the US Presidential election the spreads in dollar market have widened.

The global geopolitical scenario and the Greek problem has lead to spreads widening. However, the CNH market is stable and issuers are not having to pay off higher spreads," he said. If ICICI Bank chooses to swap the entire issue into US dollars 4.66 basis point over the three month LIBOR.

The issue was four times oversubscribed with 80 per cent of the issue was subscribed by institutional investors.

ICICI is the only private sector bank to access the CNH market twice this year.

IDBI Bank was the first bank to raise funds through a Singapore dollar denominated bond after having accessed both the Dim Sum - Hongkong and the Swiss Franc markets in the last few months.

Another public sector financial institution Export-Import Bank of India raised about 300 million Singapore dollar at 3.37-3.50 per cent.