Canara Bank $500 million bond raises India hopes

The bank issued India’s first dollar bond in six months, potentially spurring other South Asian financial institutions to follow suit as worries of a US default recedes.

Canara Bank, an Indian state-owned financial institution, issued a $500 million five-year bond through its London branch on Thursday, raising hopes that more Indian banks will raise debt in global capital markets especially as the US government moves to resolve its debt ceiling woes.

The Reg S registered bond which is the first from an Indian financial group since April, and Canara Bank’s first since March 2011 priced 15bp tighter than its initial price offering of 400bp over Treasuries. The note’s closest comparables were Mumbai-based IDBI’s 2018s, which had a G-spread of 365bp prior to announcement.

“Canara Bank’s issuance is positive for the sector and is...

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