Synopsis : Bank of Baroda has raised another $400 million through the reissuance of its U.S. dollar-denominated bonds, taking its total fundraising under the Reserve Bank of India's concessional funding window to $1.1 billion. The latest issue comes as Indian banks accelerate overseas borrowing to take advantage of the central bank's discounted dollar funding and deposit-related scheme.
Bank of Baroda, India's second-largest state-owned lender by assets, has raised $400 million through the reissuance of its 5.3180% August 2031 U.S. dollar-denominated bonds. The bank offered a yield of 5.3890% on the latest reissue, slightly higher than the original coupon, according to the lender's disclosure to stock exchanges.
The latest fundraising follows two dollar bond issuances by Bank of Baroda earlier this month. The bank had raised $400 million through three-year bonds carrying a 5.1140% coupon and another $300 million through five-year notes with a 5.3180% coupon. With the latest $400 million reissuance, the lender's total dollar bond fundraising has reached $1.1 billion.
The bonds issued earlier were priced at spreads of 90 basis points and 100 basis points over U.S. Treasury yields, respectively. The latest transaction further strengthens Bank of Baroda's foreign-currency funding position and puts it among the largest Indian state-owned banks to tap the current concessional funding opportunity.
Bank of Baroda's total fundraising is now broadly comparable with that of State Bank of India, India's largest lender, which has also raised around $1.1 billion through the special window. The development highlights how aggressively Indian banks are accessing international debt markets while favourable funding conditions remain available.
The fundraising comes against the backdrop of a broader surge in dollar-denominated borrowing by Indian banks. Between June and August, Indian lenders have raised an aggregate $11.65 billion through dollar bonds, with ICICI Bank accounting for more than a quarter of the total and emerging as the largest issuer during the period.
Banks have been rushing to complete their dollar bond transactions as the deadline for the hedging window under the Reserve Bank of India's discounted dollar deposit scheme approaches. The proceeds from these overseas borrowings are expected to help banks provide additional leverage to depositors under the scheme, making the timing of the fundraising particularly important.
The current borrowing activity also reflects banks' efforts to diversify their sources of funding beyond domestic deposits. Access to international dollar markets allows large Indian lenders to raise significant amounts of capital while taking advantage of the concessional funding framework and prevailing investor demand for Indian bank debt.
For Bank of Baroda, the latest $400 million transaction adds to an already substantial overseas fundraising programme and provides additional foreign-currency resources at a time when Indian banks are looking to strengthen their balance sheets and support credit growth. The successful bond reissuance also indicates continued access to international debt markets despite fluctuations in global interest rates and currency markets.
With Indian banks collectively raising billions of dollars in just a few months, the trend underscores the growing importance of international capital markets in funding the country's banking sector. Bank of Baroda's $1.1 billion milestone further highlights the scale at which state-owned lenders are using the RBI's concessional funding window before the related hedging facility closes.
Disclaimer : This article is for informational and educational purposes only and should not be considered investment or financial advice.
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