S&P accords middle-rating to SBI's Malaysian bond issue

MUMBAI: Global rating agency Standard & Poor's has given a `BBB-' rating to State Bank of India's five-year Malaysian ringgit bond issue.

Though the middle-rating indicates adequate protection parameters, adverse economic conditions or changing circumstances are more likely to lead to a weakened capacity of the obliger, S&P said here today.

The country's largest lender had mopped up MYR 500 million (about Rs 632 crore) through the bond issue early this month.

SBI plans to use the amount raised for the overall business expansion, SBI's Chief Financial Officer Ashok Mukand told PTI.

The bonds will be governed by the Malaysian law and will not be listed on any stock exchange, S&P said.

HSBC acted as the sole lead manager and sole book runner of the issue which was priced with a 4.9 per cent coupon in the Malaysian market.

Despite the volatile global market conditions, the issue attracted a strong demand from high quality Malaysian investors.

This was the first-ever transaction by a borrower from a country with a lower sovereign rating than Malaysia.

The issue had received a AA+ rating by Malaysian rating corporation Bernad.