India’s largest bank, State Bank of India (SBI), has once again proved its strong standing in global financial markets. SBI successfully raised $500 million dollar bonds through five-year dollar bonds from international investors, and what makes this deal special is that it came at the tightest-ever spreads over US Treasuries for an Indian issuer.
This achievement comes just weeks after Standard & Poor’s (S&P) upgraded India’s sovereign rating from BBB- to BBB, boosting global confidence in the country’s economy.
What Exactly Happened?
SBI launched a five-year bond issue benchmarked against US Treasuries. Initially, the price guidance was set at T+105 basis points (bps), but due to strong investor demand, the bank was able to narrow the spread by 30 bps, bringing it down to just T+75 bps.
Final coupon rate: 4.5%
Total raised: $500 million
Investor demand: More than $1.1 billion from 85 accounts (oversubscribed more than 2x)
Despite having the option to raise more funds, SBI decided to stick to $500 million.
Why This Is Important
This transaction marks the tightest-ever pricing for a five-year dollar bond from India. Previously, in November 2024, SBI raised a similar amount at T+82 bps, and a few years back, HCLTech had achieved T+75 bps. Now, SBI has matched that record.
Also read-SBI Loan Interest Rates Revised from 15 August 2025
The oversubscription and final pricing highlight two key things:
1. Global investors trust India’s growth story after the S&P upgrade.
2. SBI’s credit quality and reputation make it a reliable choice for foreign investors.
Who Managed the Deal?
The arrangers of this issue were some of the world’s biggest financial institutions, including:
- HSBC
- Citi Bank
- JPMorgan
- MUFG
- Standard Chartered
- SMBC Nikko
The bonds will be issued through SBI’s London branch on September 9, 2025, and listed on both the Singapore Stock Exchange and NSE-IX, GIFT City.
SBI Chairman’s Statement
SBI Chairman C.S. Setty said:
“The successful issuance of $500 million is a testament to the strong appetite for SBI bonds and the diversified investor base we have in offshore capital markets. The record-tight pricing reflects investor confidence in India’s economic growth and the credit strength of SBI.”
He also pointed out that the tight pricing reduces borrowing costs for Indian issuers, thanks to the recent sovereign rating upgrade.
What Does This Mean for India?
The success of this bond issue shows that:
International investors have renewed confidence in India’s financial sector.
Borrowing costs for Indian companies may fall, making it easier for them to raise funds globally.
India’s improved credit profile is likely to attract more foreign investments in the coming years.
Key Highlights at a Glance
- SBI raises $500 million through 5-year dollar bonds
- Final pricing at T+75 bps over US Treasuries (tightest ever for India)
- Coupon rate: 4.5%
- Oversubscription: $1.1 billion from 85 accounts
- Bonds to be issued via London branch, listed on Singapore & NSE-IX (GIFT City)
- Boosted by India’s credit rating upgrade from S&P
SBI’s latest fundraising move is not just a win for the bank but also a positive signal for India’s economy. With global investors showing strong faith, India’s improved credit rating is already paying off by lowering borrowing costs and strengthening investor trust.
This sets a strong precedent for other Indian issuers looking to tap into global markets in the near future.