Yes Bank scripting its bond story again after 6 years

Yes Bank Ltd. is set to return to the bond market for the first time in six years, according to sources familiar with the matter. The private Indian lender has engaged arrangers for a dollar issuance, with plans to sell a benchmark-sized three-year US currency note. Discussions with fixed-income investors are currently underway, starting on Monday.

This move comes amid a surge in dollar demand from Indian lenders seeking to bolster leverage on foreign currency deposits offered to overseas citizens. The Reserve Bank of India's initiative to attract capital from the country's 35-million-strong diaspora, aimed at stabilizing the rupee and replenishing foreign-exchange reserves, has spurred this trend. Since June, Indian lenders have collectively raised $5.27 billion.

Yes Bank's decision to return to the bond market follows its permanent write-off of Additional Tier 1 debt in March 2020, a move that effectively treated certain hybrid securities as capital losses if specific conditions were met. Indian authorities had intervened to seize Yes Bank, which was later rescued by a consortium led by State Bank of India. Since the rescue, the lender has experienced a steady recovery.

Sumitomo Mitsui Financial Group Inc.'s banking unit acquired a significant 25% stake in Yes Bank in 2025, becoming the firm's largest shareholder. The bank has also benefited from several ratings upgrades on its local-currency notes. Crisil Ratings elevated Yes Bank's rupee infrastructure bonds and Basel III compliant Tier 2 debt to AA+ in August, from AA- at the beginning of 2023. These ratings were based on sustained improvements in the bank's earnings profile.

Although Yes Bank's dollar bond carries a credit rating of Ba1 by Moody’s Ratings and BB+ by S&P Global Ratings, one notch below investment grade, it remains a noteworthy development in the Indian bond and loan markets.