HDFC Bank to hit dollar bond market after gap of 2 years

HDFC Bank plans to sell dollar bonds to support its plans to expand lending outside India, joining other banks in tapping opportunities in overseas markets, according to two people aware of the matter.

- Gopika Gopakumar

The country's largest private bank is expected to raise $500 million by selling five-year bonds, the people said, requesting anonymity. HDFC Bank has hired Citigroup, HSBC, JP Morgan, Mitsubishi UFJ Financial Group, Societe Generale and Standard Chartered for the proposed Reg S transaction, which bars the securities from being sold to people in the US.

HDFC Bank is set to sell the senior notes, rated Baa3/BBB, through its GIFT City branch. This will be the second such dollar bond issuance by the bank since 2021 when it became the first Indian lender to list its $1 billion foreign currency additional tier-I bonds, priced at 3.7%.

Over the last year, banks have expanded their overseas lending book as Indian corporates shifted their preference to the loan market from the bond market due to the rising US interest rates. SBI, for instance, saw a 21% growth in its overseas book as of December 2022. Bank of Baroda saw a 39% growth in its international book during the same period.