SBI launches Rs 2,000-cr retail bond issue from Monday

Mumbai, Feb 18 (PTI) The nation''s largest lenderState Bank today announced the launch of a Rs 2,000-croreretail bond issue from Monday to shore up its Tier II capital.

"Following the huge success of our maiden retail bondissue last October, which was snapped up 19 times, we arehappy to launch another issue with a better yield from Monday.

The issue is part of our planned Rs 10,000-crore retail bondissue. We will be looking forward to going to the market everyquarter," Chairman of the bank Omprakash Bhatt told reportershere today.

Chief Financial Officer of the bank Hemant Contractorsaid these Lower Tier II bonds are being issued in twoseries--Series 3 and Series 4.

Series 3 bonds have a tenor of 10 years with a calloption by SBI after five years and a coupon rate of 9.75 percent per annum for retail and 9.30 per cent for non-retailapplicants.

Series 4 bonds have a tenor of 15 years and acoupon rate of 9.95 per cent for retail and 9.45 per cent fornon-retail investors.

These bonds will be distributed through 126 branchesspanning 79 centres and will be open to only those with demataccounts. The issue opening on February 21 will close onFebruary 28.

Contractor further informed that the bond issue willnot be redeemable at the option of bond holders or withoutprior RBI permission.

The bond issue is of Rs 1,000 crore with the optionto increase the issue size by a similar quantum if the marketcondition demands it, he said. .