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SBI lists $300 million via Taiwan’s Formosa Bonds on India INX

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SBI lists $300-m Formosa bonds on India INX

On January 28, 2022, the State Bank of India (SBI) listed its 1st USD 300 million Formosa bonds on India International Exchange IFSC (India INX). SBI became the first Indian entity to raise money through Formosa Bond.

  • Through the issuance, India INX became the first Exchange in IFSC (International Financial Services Centre) to list Formosa Bonds issued by SBI.

What is Formosa bond?

i.It is a bond issued in Taiwan and listed on the Taipei Exchange. The bond is dominated by currencies other than the New Taiwan dollar.

ii.In order to qualify as Formosa bond issuers, borrowers need to have an investment grade or credit ratings of BBB or higher. 

Key Points:

i.SBI, acting through its London branch, raised USD 300 million of ‘Regulation S’ Formosa bonds at a coupon rate of 2.49 percent.

ii.The bond is benchmarked against the 5 years U.S. Treasury and priced at a spread of 100bps (basis Points) over the benchmark.

iii.A range of investors such as supranational agencies, assets managers, private bankers and financial institutions have invested in the issue. On the back of strong demand, the price guidance was revised from T+130 bps area to T+100 bps.

iv.The SBI’s Formosa Bond issuance reflects India’s acceptability among international investors.

Note – In November 2021, SBI had dual listed USD 650 million green bonds on India INX and Luxembourg Stock Exchange.

Additional Info –  In August and October 2021, Deutsche Bank raised $400 million in Taiwan via the Formosa bond.

Recent Related News:

In December 2021, the government approved the issuance of the 19th tranche of electoral bonds, which will be open for sale from January 1 to 10, 2022. The State Bank of India (SBI) has been authorised to issue and encash electoral bonds through its 29 specialised branches.

About State Bank of India (SBI):

Establishment – 1 July, 1955
Headquarters – Mumbai, Maharashtra
Chairman – Dinesh Kumar Khara