IDBI Bank, a public sector universal unit, launched a USD 500 million 5.5 year Reg S Bond issue on Monday.
"The transaction received an overwhelming response and the issue was oversubscribed by 9 times. The issue was made under the USD 1.5 billion MTN Programme listed on the Singapore Stock Exchange," said an official statement on Tuesday.
The transaction was launched at 9:30 a.m. Hong Kong time with an initial price guidance of 5-year Treasury + 395 bps.
During the course of the day, the book rapidly built up and the final price guidance was issued in the 5-year Treasury + 375 area.
With the issue finally being oversubscribed by 9 times, the issue was priced at 5-year Treasury + 370 bps (i.e. a spread tightening of 25 bps from initial price guidance) which is the tightest pricing by any Bank in India this year for a 5/5.5 year USD bond transaction.
The final coupon was 4.375% (fixed).
The transaction attracted interest from a diversified range of investors including Asset Managers (51%), Private Banks (23%), Banks (23%) and Others (3%).
Around 68% of the allocation was made to Asian Investors, 23% to European investors and 9% to investors in the Middle East.
ANZ Bank, BNP Paribas, Citibank, HSBC, RBS and Standard Chartered Bank acted as Joint Book Runners and Lead Managers to the transaction.
R.M. Malla, Chairman & Managing Director, IDBI Bank while commenting on this landmark transaction, stated, "The benchmark size USD 500 million transaction which has just been concluded is one more such successful transaction by IDBI Bank this year in the international markets."
Melwyn Rego, Executive Director, IDBI Bank, who led this transaction, stated, "IDBI Bank was quick to respond and tap the market the moment we saw a window of opportunity. This has resulted in a massive oversubscription resulting in tightly priced deal."
The Bank had an aggregate balance sheet size of Rs. 2,71,899 crore and total business of Rs 3,59,527 crore as on June 30, 2012. IDBI Bank´s operations during the quarter ended June 30, 2012 resulted in a net profit of Rs.427 Crore.
The Bank's operations during the last full financial year (2011-12) had yielded a net profit of Rs. 2032 crore.