ICICI Banks Returns to US Dollar Bond Market with $1 Billion Deal

Indian private-sector bank ICICI has successfully priced a $1 billion five-year US dollar bond at a tight spread, attracting over $3 billion in orders. This marks the bank's return to the US dollar bond market after nearly nine years.

The bond was priced at a 5.46% coupon and was sold at a tighter spread than initially guided by bankers, who had indicated a starting point of 130 basis points over US Treasuries. The fact that investors were comfortable with ICICI's credit risk and lending to India in dollars suggests that the market is becoming increasingly supportive for Indian banks.

The Reserve Bank of India (RBI) has recently launched a swap facility that allows eligible external commercial borrowings to be hedged at a fixed 1.5% per year, making it cheaper for banks to lock in future exchange rates and reducing uncertainty.