merisarkar news service New Delhi February 19, 2011
2K Crore retail bond issue: Bhatt
The nation's largest lender, State Bank of India, on Friday announced the launch of a Rs. 2,000-crore retail bond issue from Monday to shore up its tier-II capital.
"Following the huge success of our maiden retail bond issue last October, which was snapped up 19 times, we are happy to launch another issue with a better yield from Monday. The issue is part of our planned Rs. 10,000-crore retail bond issue. We will be looking forward to going to the market every quarter," SBI chairman OP Bhatt said.
Hemant Contractor, chief financial officer of the bank, said these lower tier-II bonds are being issued in two series--Series 3 and Series 4.
Series 3 bonds have a tenor of 10 years with a call option by SBI after five years and a coupon rate of 9.75 per cent per annum for retail and 9.30 per cent for non-retail applicants.Series 4 bonds have a tenor of 15 years and a coupon rate of 9.95 per cent for retail and 9.45 per cent for non-retail investors.
These bonds will be distributed through 126 branches spanning 79 centres and will be open to only those with demat accounts. The issue opening on February 21 will close on February 28.
Contractor further informed that the bond issue will not be redeemable at the option of bond holders or without prior RBI permission.
The bond issue is of Rs. 1,000 crore with the option to increase the issue size by a similar quantum if the market condition demands it, he said.
