HDFC Bank has completed the issuance of $750 million in senior unsecured dollar bonds through its GIFT City IFSC Banking Unit. The bonds have a 5-year tenure and a coupon rate of 5.067% per annum. The allotment date is scheduled for June 24, 2026, with maturity on June 24, 2031. Interest payments will occur semi-annually, commencing December 24, 2026. This issuance highlights the bank's ability to access international capital markets and its strong financial standing. The bonds are expected to be rated Baa3 by Moody’s and BBB by S&P.
The proceeds from this bond issuance will be used for general banking activities, as outlined in the term sheet. The notes are expected to be listed on the India International Exchange (IFSC) Limited and NSE IFSC, enhancing liquidity for investors. The bank utilized the Reserve Bank of India's (RBI) new subsidized hedging facility for overseas borrowings. This scheme offers a swap facility at a fixed rate of 1.5% per annum for external commercial borrowings with an average maturity of at least three years, aiming to lower hedging costs and support the rupee.
Initially, HDFC Bank was looking to raise at least $500 million, with an initial price guidance of the 5-year U.S. Treasury yield plus 120 basis points. However, strong demand was anticipated, with merchant bankers expecting the final cutoff to be below 100 basis points over U.S. Treasury yields. This strong demand allowed the bank to potentially raise more than the initial target of $500 million, ultimately securing $750 million. The facility helps HDFC Bank to secure funds at a lower overall cost, diversify its capital sources, and fund its foreign branches and subsidiaries, as well as for general corporate purposes.
