InvestorQ : Why are markets so positive about the $1 billion AT1 bonds that HDFC Bank is raising?
Rutuja Nigam made post

Why are markets so positive about the $1 billion AT1 bonds that HDFC Bank is raising?

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4 months ago
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HDFC Bank has just launched its $1 billion AT-1 or Additional Tier 1 bond issue. However, what is unique about this issue is that it is at an all-time low pricing of 3.7%. The original street consensus was at 4.125% but the actual pricing turned out much less than that. Despite these low yields offered, the response from the global investors based out of the US and Europe was highly enthusiastic, considering the stability of HDFC Bank.

There were a number of marquee investors in the bond issue. Some key investors who subscribed to these AT-1 bonds issue include Fidelity, BlackRock and Government Investment Corporation of Singapore. The overall book was subscribed by 4 times eliciting demand for nearly $4 billion. The AT-1 bond issue was rated at a high Ba3 by Moody's. This should come as a boost for SBI which is planning a mega AT1 bond issue of Rs.14,000 crore.

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