India's ICICI Bank has raised $300 million from a bond offer through its Singapore branch. And despite the summer holidays, bankers selling the deal managed to find enough investors to price the bonds inside ICICI's existing debt.
ABN AMRO, Bank of America and Deutsche Bank were mandated last Wednesday and turned the deal around in fairly short order. A total of 49 accounts placed orders for more than $400 million, with 27% of the investors coming from Europe and the balance split equally between Asian and overseas US investors.
The bonds have a five-year maturity and carry a coupon of 5%, paying semi-annually. The deal, which was eventually issued at 99.468% or 168bp over US Treasuries, had been marketed at a price range of 165-175bp. The spread is equivalent to about 120bp over Libor. For comparison Exim's 2009 bonds are trading at 112bp over Libor at the moment and IDBI's comparable bonds are at 142bp. ICICI's 2008 bonds are trading at 124bp.
Bankers on the deal were pleased to turn it around so quickly and yet still price inside the existing debt. And because a lot of the typical investors in a deal like this were on holiday, particularly in Europe, the bankers were also forced to look to some new investors, which gave ICICI some much-appreciated diversity.
The deal was offered through Singapore because the funds will be used by ICICI's foreign operations and offering outside India beats some withholding taxes. The deal is sold to US investors under the SEC's Regulation S and the notes are listed in Luxembourg. Standard & Poor's rates them at BB and Moody's at Baa3.