Bank of Baroda Raises $700 Million via Dual-Tranche Bonds

Bank of Baroda raised $700 million through the issuance of senior unsecured fixed rate notes in two tranches. The final issuance consists of $400 million with a three-year maturity at a coupon rate of 5.114% per annum and $300 million with a five-year maturity at a coupon rate of 5.318% per annum.

The bank initially planned to raise $500 million per maturity, providing guidance of spreads 120 to 130 basis points above US Treasuries. The final allocation shifted to the $400 million and $300 million split. The bonds will be issued via the bank's International Financial Services Centre Banking unit at GIFT City and listed on the Singapore Stock Exchange, India INX, and the NSE-IX Exchange.

This funding effort follows a $500 million five-year bond sale by State Bank of India on August 12, which attracted nearly $2.5 billion in bids. The increase in dollar-denominated issues by Indian banks follows a June announcement by the Reserve Bank of India regarding a swap facility designed to lower overseas borrowing costs. Bank of Baroda intends to use the proceeds for head office requirements, foreign branches, and general corporate purposes.