SBI raises Rs 3,101 cr via AT-1 bonds at coupon of 8.10%
Summary
The Perpetual bonds, which include AT-1 bonds, are considered riskier than other debt instruments, as they can be written down before equity, leading to losses for investors. Investors in YES Banks AT-1 bonds suffered such losses in 2020, while more recently, at a global level, perpetual bonds were written off following Credit Suisses bailout.Given government ownership of Thursdays bond sale marks the first AT-1 issuance by any In June, SBIs board approved the raising of Rs 50,000 crore via bonds in the current financial year. Mumbai: State Bank of India on Thursday raised Rs 3,101 crore of funds via additional tier-1, or perpetual, bonds at a coupon of 8.10%, sources aware of the development said.The AT-1 bonds include a call option after 10 years. The additional subscription option was Rs 7,000 crore.Perpetual bonds, which include AT-1 bonds, are considered riskier than other debt instruments, as they can be written down before equity, leading to losses for investors. Investors in YES Banks AT-1 bonds suffered such losses in 2020, while more recently, at a global level, perpetual bonds were written off following Credit Suisses bailout.Given government ownership of SBI and its status as the largest bank in the country, the lenders bonds generally bear the lowest coupon rates in the sector.Thursdays bond sale marks the first AT-1 issuance by any Indian bank after the Credit Suisse crisis in March.In June, SBIs board approved the raising of Rs 50,000 crore via bonds in the current financial year.