SBI returns to dollar bond market after a year, prices five-year notes 88 bps over US Treasury

Synopsis

State Bank of India is targeting up to $500 million through a five-year dollar bond after attracting over $2 billion in peak orders. Strong demand enabled SBI to tighten pricing guidance, highlighting robust investor appetite for its debt.

State Bank of India, the country’s largest lender, is returning to the public dollar bond market after nearly a year, with the bank expected to raise around $500 million through a five-year bond issue after attracting more than $2 billion at the peak of the order book.

SBI has tightened the pricing guidance for the five-year bonds to 88 basis points over the five-year US Treasury, 32 basis points tighter than the initial guidance of around 120 basis points, given strong investor demand. With the five-year US Treasury yield at around 4.41%, the SBI bond is likely to be priced at about 5.29%.

“The peak order book was more than $2 billion. But SBI is likely to keep between $400 million to $500 million depending on the pricing,” said a person familiar with the issue.

The bonds, issued through SBI’s London branch, are due August 18, 2031, and are expected to settle on August 18, 2026. The proceeds will be used for general corporate purposes and to meet funding requirements of SBI’s overseas offices and branches.

The bond issue comes nearly a year after SBI last tapped the public dollar market. In September 2025, the lender raised $500 million through five-year bonds priced at 75 basis points over the five-year US Treasury.

SBI’s latest transaction also comes after the bank withdrew a planned dollar bond issue in late June as overseas borrowing costs widened amid a rush of Indian issuers tapping the international market. Investors had demanded a higher yield, making the issue less attractive for the bank.

Since then, SBI has raised funds through privately placed bonds. In late June, its London branch raised $300 million through three-year floating-rate bonds priced at SOFR plus 100 basis points.

The strong demand for the latest public issue has allowed SBI to narrow the spread from its initial guidance. The notes are expected to carry ratings of BBB/BBB-.

BNP Paribas, Citigroup, Crédit Agricole CIB, Emirates NBD, HSBC, MUFG and Standard Chartered are acting as joint lead managers and bookrunners.

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