ICICI Bank set to raise up to $500 million by selling dollar bonds

Mumbai: ICICI Bank Ltd, India’s largest private sector bank by assets, is set to raise up to $500 million (around Rs.3,200 crore today) by selling five-year dollar bonds to investors in Europe and Asia, two people familiar with the issue said.

The issue opened earlier on Wednesday and is likely to close by late evening.

“This could be the last dollar bond issue from India before the European summer break in the second half of August,” said a person involved in the deal, adding that the issue will be originated from the bank’s Dubai branch.

The initial pricing guidance for the issue is 180 basis points above the five-year US treasury yield. On Tuesday, five-year US treasury notes closed at a yield of 1.625%.

One basis point is 0.01 percentage point.

This is ICICI Bank’s first dollar bond in 2015. It is part of the bank’s $7.5 billion MTN (medium-term note) programme.

“This is an opportunistic issue. The bank does not need the money urgently but the market is constructive, spreads are good and it is felt that the US Fed will hike rates in September so there is no point waiting,” said the second person quoted above.

The issue has been rated in line with India’s sovereign BBB- rating.

Banks such as ICICI Bank raise dollar funds to support their overseas loan books which are used to lend to Indian companies abroad.

Hongkong and Shanghai Banking Corp. Ltd (HSBC), Barclays Plc, JP Morgan Chase and Co., Bank of America-Merrill Lynch and Standard Chartered Plc are the bankers to the issue.

ICICI Bank