India’s second-largest private-sector lender, ICICI Bank, is set to return to the US dollar-denominated bond market for the fourth time in a month, as Indian banks accelerate offshore fundraising under the Reserve Bank of India’s discounted window.
ICICI Bank plans to raise $1 billion through a private placement of five-year bonds carrying a 5.41% coupon, according to two merchant bankers familiar with the transaction who requested anonymity because they were not authorised to speak to the media.
The proposed deal would take ICICI Bank’s total fundraising under the RBI’s discounted window to $3.05 billion, making it the largest issuer under the programme. It would also put the lender ahead of HDFC Bank, India’s largest private-sector bank, which has raised $2.50 billion so far.
ICICI Bank first returned to the international bond market in nearly nine years in late July, raising $1 billion through a five-year bond at a 5.46% coupon and a spread of 100 basis points over US Treasuries.
The lender followed that with a $300 million reissue in early August at a 5.3520% yield. Last week, it raised another $750 million through five-year notes at a spread of 105 basis points over Treasuries and a 5.4170% coupon.
The latest proposed transaction comes amid a broader wave of dollar-denominated fundraising by Indian banks after the RBI introduced a concessional swap window for foreign-currency deposits. Total proceeds from such bank bond issuances have now reached about $10.3 billion.
The RBI’s initiative has enabled lenders to access cheaper foreign-currency funding, providing additional rupee liquidity that can support lending and investment while helping banks protect their margins.
Indian lenders have stepped up dollar bond sales in recent days as the deadline for the special window approaches. Much of the funds raised are being used to provide leverage to customers expected to place the proceeds under the discounted dollar deposit scheme.
Earlier this month, the RBI announced that the facility available to banks for hedging non-resident deposits would close a month earlier than initially planned, with the window scheduled to end on August 31.
ICICI Bank did not respond to a request for comment on the proposed bond sale.
