State Bank of India returns to dollar debt market, bankers see strong demand

State Bank of India, the country’s largest lender, ​is returning to the public dollar bond market after ‌nearly a year and is expected to see ​strong demand for its planned five-year issue, ⁠three merchant bankers said on Tuesday (August 11, 2026).

The bonds will be issued through SBI’s London branch, with initial price guidance set at roughly ‌120 basis points over U.S. Treasuries.

The issue comes at a time when Indian banks ‌are making a beeline for dollar issues after ‌the ⁠Reserve Bank of India in June a opened ⁠a swap facility, making overseas borrowing cheaper.

SBI is expected to raise at least $500 million, although the final size will depend on investor ​demand.

The lender has begun ‌marketing the bonds and is expected to complete the sale by the end of the week, the bankers said, declining to be identified as they ‌were not authorised to speak to the media.

SBI did ​not immediately respond to a Reuters email seeking comment.

One banker said SBI was offering ⁠a sizeable spread premium, although final pricing could tighten by as much as 30 basis points. The banker also ‌expected the deal size to reach $1 billion or more.

Fitch Ratings has assigned an expected BBB- rating to the proposed senior unsecured notes.

The notes will be direct, unsecured and unsubordinated obligations of SBI, ranking equally with its other unsecured and unsubordinated debt, the rating agency ‌said.

SBI had planned to raise $1 billion through a public ​dollar bond issue in June, but deferred the sale due to higher borrowing costs following heavy ⁠issuance by Indian lenders.

The bank subsequently raised $600 million through ⁠a private placement of three-year dollar bonds at a spread of 100 basis points over the ‌Secured Overnight Financing Rate (SOFR).

Large private lenders, including HDFC Bank, Axis Bank and ICICI Bank, raised funds ​through dollar bonds in June and July.