Indian Overseas Bank set to raise $500 million on Friday via medium notes

Indian Overseas Bank is raising $500 million (Rs2,220 crore) on Friday by way of medium-term notes (MTN) to finance international operations.

HSBC, Citibank, Standard Chartered, Royal Bank of Scotland and JP Morgan are the merchant bankers to the mop-up.

M Narendra, chairman and managing director, Indian Overseas Bank, said the bank’s top team is in London for roadshows, but refused to give details on the amount and pricing.

“All that will depend on investor appetite,” Narendra said.
Earlier, another state-owned lender, IDBI Bank, announced plans to raise notes through Swiss francs.

“We intend to hold roadshows in Switzerland in early May, but things haven’t been frozen yet,” said Melwyn Rego, executive director and head of international banking, IDBI Bank, told DNA.

Initially IDBI Bank was planning to raise $250 to 300 million. “After the quake in Japan, the markets haven’t been good, that’s why we didn’t go for it,” Rego said.

Arrangers feel more banks with foreign offices will look at raising funds through the MTN route now.

“Indian banks are viewed well here. Investors feel comfortable because Indian banks are not affected by recession,” said a London-based arranger, who did not wish to be named.

This arranger felt hat Axis Bank may also consider raising funds through MTNs as the private sector lendor is looking at proposals for a branch in London.

“Among public sector banks, Syndicate Bank may look at raising funds but it depends on the management,” he said.