India's largest lender SBI has said that it is considering raising $2 billion through offshore bonds. The Board will be convened on 18th April to consider this.
The State Bank of India in a regulatory filing said that, the board will consider the fund raising, through a public offer or private placement of senior unsecured notes in US dollar or any other convertible foreign currency during the financial Year 2023-24.
As per Business Standard, last month, SBI has raised Rs 3,717 crore through additional tier 1 bond sale. This is the third Basel III compliant additional tier 1 (AT1) bond sale. The bank said that, the latest issue was closed at a coupon rate of 8.25%. This final proceeds will be used to increase its additional tier 1 capital and overall capital base of the bank. The bank will also use it to strengthen the capital adequacy inaccordance with the RBI guidelines.
Offshore bonds can hold a variety of assets like stocks and shares or mutual funds and is also an efficient tax wrapper. These bonds add the legal and tax shield of a life insurance policy to an investment portfolio.