HDFC Bank raises $1 bn through AT-1 bonds at 3.7%

HDFC Bank has mobilised $1 billion (over Rs 7,400 crore) by means of an extra tier-I (AT-1) perpetual bond concern at a coupon price considerably decrease than the preliminary steerage.
While the preliminary steerage was 4.125 per cent, the financial institution has been in a position to get a remaining pricing of three.7 per cent, regardless of considerations about AT-1 bonds after the Yes Bank AT-1 write-off. The bond providing acquired robust demand from buyers throughout markets, and the general demand was $4.5 billion.
“HDFC Bank’s $1 billion AT-1 bond sale, the largest offshore sale of these bonds by an Indian entity, was subscribed several times within hours of its launch on Wednesday,” stated a banking supply.
“The Notes will be listed on the India International Exchange (IFSC),” the personal financial institution stated in an trade submitting. Global buyers like GIC Singapore, Blackrock, Fidelity Investment, HSBC Global Asset Management, JP Morgan Asset Management, Lombard Odier and Value Partners have reportedly invested within the bonds.

Ashish Parthasarthy, treasurer, HDFC Bank, stated, “We believe that this successful issuance will set the road for other Indian players looking to raise AT-1 bonds in overseas markets.”
According to market sources, the AT-1 concern from HDFC Bank had come at a time when the investor neighborhood raised considerations about such bonds as that they had suffered losses when Yes Bank extinguished its AT-1 bonds as a part of the bailout. HDFC Bank bonds are rated Ba3 by Moody’s. A Ba3 score is beneath funding grade and bonds that get this score are categorised as junk bonds.
The financial institution’s AT-1 concern got here a day after the RBI allowed the financial institution to concern bank cards to new clients. Sashidhar Jagdishan, HDFC Bank’s MD and CEO, has stated that the lender will probably be aggressive and “come back with a bang” because it seeks to win again misplaced market share within the bank card phase.