Indian AT1 capital raising gets off to poor start

The country's largest commercial bank ends up having to cut the size of the sector's debut dollar-denominated AT1 deal after investors steer clear.

State Bank of India completed the country’s first US dollar-denominated Additional Tier 1 capital AT1 deal on Wednesday, paving the way for other lenders to follow suit in a country where bad loans are piling up.

However, the perpetual non-call five-year, Basel-III compliant transaction received a decidedly cool reception from investors, leading to a reduction in issue size from $500 million to $300 million.

The Baa3BBB-BBB- rated bank only managed to capture peak demand of $700 million shortly before the release of final price guidance according to one syndicate banker.

This stands in sharp contract to Singapore’s DBS,...

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