The Hindu Business Line : ICICI Bank offers $340-m bond issue at 7.25 pc

Hybrid debt nature
The bonds have some features of equities, in that they have no maturity.
ICICI has the option to buy back the bonds after 10 years.

Mumbai , Aug. 18

ICICI Bank's $340-million perpetual bond issue was offered at a coupon of 7.25 per cent, 194 basis points over LIBOR.

This is the first offering by an Indian bank of foreign currency perpetual subordinate debt securities qualifying as Tier-1 capital.

It comes after the RBI allowed banks to float hybrid debt overseas to shore up their capital base.

The bonds are in the nature of hybrid debt, having some features of equities, in that they have no maturity.

ICICI has the option to buy back the bonds after 10 years.

ICICI's offer received a $3.60-billion order book, and was subscribed over 10 times, said the bank. The US accounted for 37 per cent of the sales, Asia 30 per cent and Europe 33 per cent.

"The issue fetched good rates, the coupon being below the tight end of the initial price guidance," said Ms Vishakha Mulye, Chief Financial Officer and Treasurer, ICICI Bank.

It translates into a spread of 247 basis points over 10-year US treasuries, said a statement from the bank. Early this month, the bank had raised Rs 225 crore through rupee-denominated perpetual bonds at a coupon of 10 per cent. Around the same time, UTI Bank, too, raised $150 million (as Tier-II capital) through an overseas debt offering. The bonds of its Euro 1 billion medium note programme (MTN) were listed in Singapore.

They were priced at 170 basis points above the six-month LIBOR, taking the coupon to 7.25 per cent.