MUMBAI - India's Kotak Mahindra Bank has accepted bids worth $650 million for its U.S. dollar bonds maturing in five years at a coupon rate 27 basis points lower than the initial price guidance, three bankers said on Wednesday.
Kotak Mahindra Bank is the sixth Indian lender to raise dollar funds through sale of bonds under the central bank's discounted swap window.
The private lender will pay a coupon of 5.4780%, 108 basis points above U.S. Treasuries.
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The net proceeds will be used to diversify the bank's funding sources and for general corporate purposes.
Indian lenders have raised an aggregate of $6.95 billion since the Reserve Bank of India announced a concessional hedging facility on June 5.
ICICI Bank leads the race, followed by Axis Bank; these lenders have raised more than half of the total quantum.
Most of the funds raised through these bond issuances would be used for leverage on non-resident deposits.
RBI had provided a discounted swap facility to banks for hedging against these deposits, which will close on August 31, a month earlier than planned, leading to a race for raising dollars.
