Kotak Mahindra joins peers in tapping dollar debt before RBI window shuts
MUMBAI: India’s Kotak Mahindra Bank has accepted bids worth $650 million for its U.S. dollar bonds maturing in five years at a coupon rate 27 basis points lower than the initial price guidance, three bankers said on Wednesday. Kotak Mahindra Bank is the sixth Indian lender to raise dollar funds through sale of bonds under the central bank’s discounted swap window. The private lender will pay a…
India's Kotak Mahindra Bank has successfully issued $650 million worth of U.S. dollar bonds with a 5.4780% coupon rate, which is 27 basis points lower than initially anticipated. This move places Kotak Mahindra as the sixth Indian bank to tap the central bank's discounted swap window for dollar funds. The private lender intends to use the net proceeds to diversify its funding sources and cater to general corporate needs.
Since the Reserve Bank of India introduced a concessional hedging facility on June 5, Indian lenders have collectively raised $6.95 billion through such bond issuances. Among these issuers, ICICI Bank leads the pack, followed by Axis Bank, which have collectively raised more than half of the total amount. Most of the funds raised are earmarked for leveraging non-resident deposits.
The RBI had previously provided a discounted swap facility to banks to hedge against these deposits, but the window is closing earlier than planned on August 31, triggering a rush among banks to raise dollars.
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