Following strong investor demand for State Bank of India’s (SBI) recent foreign-currency offering, Bank of Baroda (BOB) is preparing to enter the dollar funding market with a potential dual-tranche bond issue. India’s second-largest state-run lender aims to raise around $500 million each across three-year and five-year maturities through its GIFT City branch, with the flexibility to upsize based on pricing cutoffs. BOB has provided initial guidance spreads of 120 basis points above U.S. Treasuries for the three-year tranche and 130 basis points for the five-year option, with expected ratings of BBB from S&P, BBB- from Fitch, and BBB+ from CareEdge. Proceeds will support funding requirements for the bank’s head office, overseas branches, and general corporate purposes. This move highlights a broader trend of Indian financial institutions—including HDFC Bank, Axis Bank, and ICICI Bank—tapping international debt markets to leverage the Reserve Bank of India’s June swap facility, which reduced hedging and borrowing costs. The market’s strong appetite was underscored a day prior when SBI raised $500 million via a five-year bond priced at an 88-basis-point spread, sharply lower than its initial 120-basis-point guidance after attracting nearly $2.5 billion in bids.
Indian Lenders Continue Offshore Debt Rush as Bank of Baroda Tests Foreign Markets
