$300 mn in Formosa bonds: SBI chairman says India a hit globally

SBI Kannada cheque
Hindu rate of growth is a term describing low Indian economic growth rate from the 1950s to the 1980s, which averaged 3.5 per cent. Representational image

The State Bank of India (SBI) has raised USD 300 million through the issuance of Formosa Bonds, bonds issued in Taiwan, in its bid to tap foreign funds in order to prepare for potential growth in credit demand in the coming times.

SBI Chairman Dinesh Khara on Friday exuded confidence on the issuance of the bonds, saying the fact that the Formosa bonds were issued and received well by global investors was a sign of faith these investors had in the Indian economy and its growth.

“This first successful issuance of Formosa Bond by any Indian commercial bank, is a testimony of the confidence reposed by the overseas investors into India’s growth story and also in SBI, in particular. This is a reflection of India’s march towards the next step of being a developed country,” Khara said at the listing ceremony of the Formosa bonds on India INX.

SBI is the first Indian entity to raise money through Formosa Bond, which has been bought by a wide range of investors including assets managers, private bankers and financial institutions across the globe.

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“It very clearly reflects how far India has reached in terms of the acceptability with all the international investors,” Khara said.

The Regulation S Formosa bonds were issued at a coupon of 2.49 per cent for five-year money, benchmarked against the five-year US Treasury. It was priced at a spread of 100 basis points (bps) over the benchmark, SBI had said in a statement.

On the back of strong demand, the price guidance was revised from T+130 bps area to T+100 bps.

Formosa bonds are listed on the Taipei Exchange, and dominated by currencies other than the Taiwan dollar. Borrowers should have a minimum investment grade of BBB credit rating.

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