Bank of Baroda raises $700m via overseas bonds

By Milan Rojan

Bank of Baroda has raised $700 million through a dual-tranche overseas bond issuance, as the Indian lender has sought to diversify its funding base and support its longer-term growth plans.

The issuance has comprised $400m of three-year senior unsecured fixed-rate notes and $300 million of five-year notes under the bank’s $4 billion Medium-Term Note Programme. The bonds have been issued through Bank of Baroda’s International Financial Services Centre Banking Unit at GIFT City.

Dr Debadatta Chand, Managing Director and CEO of Bank of Baroda, said: “The exceptionally strong investor response to our USD 700 million bond issuance reflects deep market confidence in the Bank.”

The offering has attracted strong investor demand, with the order book reaching $2.67 billion, equivalent to almost 3.8 times the final issue size.

The three-year tranche has carried a coupon of 5.114%, representing a spread of 90 basis points over the three-year US Treasury rate. The five-year tranche has carried a 5.318% coupon, with a 100-basis-point spread over the five-year US Treasury rate.

Strong demand has enabled the bank to tighten pricing from its initial guidance of 120 basis points for the three-year notes and 130 basis points for the five-year notes. Bank of Baroda has said the transaction has achieved its tightest-ever spread over US Treasury rates for one of its bond issuances.

The notes have been rated BBB (Stable) by S&P, BBB- (Stable) by Fitch and BBB+ (Stable) by CareEdge Global.

The bonds have been scheduled to settle on 20 August 2026 and mature in August 2029 and August 2031 respectively. They have also been listed on India International Exchange, NSE International Exchange and the Singapore Exchange.

The issuance has highlighted continued access to international debt markets for Indian banks as lenders have sought to broaden funding sources amid evolving global financing conditions.