ICICI Bank has accepted bids worth $750 million for a new five-year U.S. dollar bond at a spread tighter than initial guidance, two merchant bankers said on Tuesday, extending a wave of offshore fundraising by Indian lenders after the central bank opened a concessional swap window for foreign-currency deposits.
The deal is ICICI Bank's third dollar fundraising in a month and takes its total raised to $2.05 billion, putting it at the top of the chart in raising dollar debt since the Reserve Bank of India announced the window in early June.
Banks have been able to raise cheaper funds since the window was announced, giving them rupee liquidity that can support lending and investment and help margins.
ICICI Bank, the country's second-largest private lender by assets, priced the latest notes at a spread of 105 basis points over U.S. Treasuries, below the initial guidance of 130 bps. The coupon was set at 5.4170%.
The bankers requested anonymity as they are not authorised to speak to media, while the bank did not reply to a Reuters email seeking comment outside regular business hours.
Market intelligence firm CreditSights had expected the final spread at 100 to 105 bps, but put fair value at 90 bps after earlier estimating 85 bps, citing expected supply from lenders especially after an early closure of a swap window meant to garner non-resident deposits.
The bankers said ICICI Bank is also in talks with foreign lenders for a dollar loan worth $1.45 billion.
In July, ICICI Bank raised $1 billion through a five-year paper at 100 basis points over Treasuries, lower than the initial guidance of 130 basis points, with a 5.46% coupon. That was its first issuance in nearly nine years.
Earlier this month, the lender reissued these papers at a yield of 5.3520%, raising $300 million.
The latest issuance witnessed bids worth over $2 billion and the proceeds would be used for general corporate purposes. The notes will be rated "Baa3" and "BBB" by Moody's and S&P, in line with the bank's existing ratings.
