Mumbai: Bank of Baroda has raised USD 700 million, or about Rs 6,678 crore, through a two-part overseas bond issue that attracted demand nearly four times the amount offered.
The bank issued three-year and five-year senior unsecured fixed-rate notes through its banking unit at GIFT City. The bonds were issued under its USD 4 billion medium-term note programme.
Strong Demand
Investor orders peaked at USD 2.67 billion, or around Rs 25,472 crore. This was about 3.8 times the issue size.
Bank of Baroda raised USD 400 million, or nearly Rs 3,816 crore, through three-year bonds carrying a coupon of 5.114 per cent. The pricing was 90 basis points above the three-year US Treasury rate.
It raised another USD 300 million, or about Rs 2,862 crore, through five-year bonds. These notes carry a coupon of 5.318 per cent, which is 100 basis points above the five-year US Treasury rate.
Pricing Improves
Strong demand allowed the bank to reduce the pricing from its initial guidance. The original guidance was 120 basis points above US Treasury yields for the three-year bonds and 130 basis points for the five-year notes.
The final spreads were 30 basis points lower for both tranches. The bank said these were its tightest-ever spreads over US Treasury rates.
Managing Director and Chief Executive Officer Debadatta Chand said the response reflected investor confidence in the bank’s strength and direction.
He said the competitive pricing would help the bank widen its funding sources and support growth.
Ratings And Listing
S&P rated the issue BBB with a stable outlook, while Fitch assigned BBB- with a stable outlook. CareEdge Global rated it BBB+ with a stable outlook.
The bonds will be listed on India INX, NSE International Exchange and the Singapore Exchange.
The notes will settle on August 20, 2026. The three-year bonds will mature in August 2029, while the five-year bonds will mature in August 2031. Rupee values are approximate, based on an exchange rate of Rs 95.40 per dollar. Reuters reported the rupee near Rs 95.40 per dollar on Friday.
