India’s ICICI Bank to join peers in dollar debt funding under RBI swap window, sources say
By Dharamraj Dhutia
MUMBAI, July 3 (Reuters) – India’s ICICI Bank plans its first dollar bond sale in nearly nine years, joining peers HDFC Bank and Axis Bank in leveraging the central bank’s lower-cost hedging facility for foreign-currency issuance, two bankers said on Friday.
The lender is expected to raise at least $500 million through a likely five-year bond issue, according to the bankers familiar with the matter.
However, the issuance is unlikely before the second half of August, as ICICI Bank is awaiting its quarterly financial results later this month and must complete the renewal of its Global Medium Term Note programme, the bankers said.
“There are plans to tap the dollar bond market, but it may take 45-60 days for the actual issuance to happen as a lot of procedures are still pending,” one of the bankers said.
The bankers requested anonymity as they are not authorised to speak to media. ICICI Bank did not immediately respond to a Reuters request for comment.
If completed, the transaction would mark ICICI Bank’s first dollar bond issuance since December 2017, when it raised $500 million through 10-year bonds at a coupon of 3.80%.
The fundraising comes after the Reserve Bank of India in June introduced a swap facility allowing eligible external commercial borrowings by banks and state-owned companies to be hedged at a fixed rate of 1.5% per annum, compounded semi-annually.
The measure significantly lowers hedging costs, making overseas dollar fundraising more attractive.
HDFC Bank became the first lender to use the new facility, raising $750 million through five-year bonds in June. Axis Bank followed with an $800 million dual-tranche dollar bond issue.
(Reporting by Dharamraj Dhutia; Editing by Sherry Jacob-Phillips)
