Bank of Baroda to raise at least Rs 3,100 crore via overseas bond market: report

Bank of Baroda (BoB) on Wednesday became the second domestic issuer to approach the overseas bond market in the New Year with a 5.5-year $500-million (around 3,100 crore) issue.

"We have just announced a benchmark ($500 million or above) US dollar unsecured senior bond issue (REG S) for a 5.5-year money. The final guidance for the issue, maturing in 2019 has been set at 330 bps over the US treasury," one of the merchant bankers, who wished not to be named citing confidentiality issues, told PTI.

This Monday, the largest telecom Bharti Airtel raised 250 million euros at a coupon of 385 bsp above the EUR MS rate by reopening its 750 million euro issue which it had raised in December at 4.05 per cent.

State-run lender BoB, which is the second largest PSU lender in the country, could not be contacted for comment.

While the Bharti issue was aimed at preparing a war-chest for a forthcoming spectrum auction, the

BoB issue could be used for on-lending purposes for its overseas clients.

In the just-concluded year, domestic corporates and financial institutions had raised a record $16 billion international debt, up 60 per cent from 2012.

The overseas fund raising had ebbed following the May 24 tapering talk by the US Fed, which spiked interest rates in Western markets. Since then there were only a few issues including HDFC Bank's $500 million in October and ICICI Bank's $750 million in November.