RBL Bank raises $350m in debut global bond issue

By Divya Shah

RBL Bank has raised $350 million from overseas investors through its first-ever international bond issuance, marking its entry into global debt markets. 

The five-year US dollar-denominated bond attracted strong investor interest, with peak orders exceeding $2.2 billion, higher than the amount offered. The robust demand enabled the bank to secure more favourable pricing than initially expected. 

The bond was priced at 120 basis points above the five-year US Treasury yield, tightening from the initial guidance of around 150 basis points. Based on prevailing Treasury yields, the bond carries an annual yield of approximately 5.79%. 

Around 75% of investor demand came from long-only investors, including insurance companies and pension funds, while the remainder came from hedge funds and banks. 

The proceeds from the issuance will be used to support the bank’s growth initiatives through its GIFT City operations and to extend the maturity profile of its liabilities. 

Part of the funds will also be used to refinance short-term borrowings linked to the bank’s Foreign Currency Non-Resident (Bank) [FCNR(B)] deposit business. By replacing shorter-term funding with longer-maturity capital, the bank aims to achieve a better match between its assets and liabilities. 

Earlier this month, RBL Bank disclosed that it had mobilised $3.4 billion in FCNR(B) deposits before the Reserve Bank of India’s concessional swap facility closed on 31 August. The bank’s international banking unit had extended $1.08 billion in loans against these deposits. 

The successful bond issuance diversifies RBL Bank’s funding sources and strengthens its access to international capital markets, while highlighting strong global investor confidence in the lender’s growth strategy and funding profile.