SBI sets benchmark with $750 million five-year bond

State Bank of India SBI, majority-owned by the government, set a benchmark for future Indian issuers when it a priced a $750 million five-year bond in the early hours of yesterday morning Hong Kong time.

Initial price guidance of mid-swaps plus 200bp-215bp on Tuesday was revised to 190bp-200bp after the order book grew rapidly to $5 billion from 250 accounts. The issue spread was finally fixed at 190bp over mid-swaps, which translated into 226.4bp over the yield of the five-year benchmark US Treasury bond at the time of pricing. Using mid-swaps guidance reflected the way the bank sets its funding targets, but also the lack of directly comparable cash bonds in the secondary market,...