ICICI Bank's successful inaugural dollar bond sale, marked by strong investor appetite and a low interest rate, is expected to encourage more domestic lenders to tap overseas debt markets in the coming weeks as banks seek to lock in competitive funding costs amid sustained global demand for Indian financial paper.The private sector lender has raised $1 billion through a five-year dollar-denominated bond issued via its GIFT City branch, doubling the deal size from an initially planned $500 million after attracting strong investor demand.
A basis point is a hundredth of a percentage point.The bonds are scheduled to be allotted on July 30.132618584 The success of ICICI Bank's transaction demonstrates that high-quality Indian bank credit continues to enjoy strong sponsorship from global investors despite a busy primary market, one banker involved in the deal said on condition of anonymity.
The ability to tighten pricing by around 30 basis points and double the issue size sends a strong signal for other issuers waiting on the sidelines.
The successful offering marks a sharp contrast to that of Bank of Baroda, which last month shelved its planned dollar bond sale after investors sought a wider spread over US Treasury yields, citing a glut of Indian issuances in the offshore market.
