HDFC Bank on Wednesday launched its $1 billion additional tier-I (AT1) bond issue and was able to close the pricing at a level substantially lower than the initial guidance, arrangers to the issue said.

The final closure for the five-year perpetual bond sale is yet to happen and will be announced later, they said, adding the issue has attracted an overwhelming response.

This is the biggest AT1 bond issue ever, and the first since the Yes Bank case where over Rs 8,400 crore of outstanding debt got written off during the time of the troubled lender’s bailout in March 2020. The episode had led to concerns over the efficacy of the instrument.

The last fundraising through the route was by SBI in 2016, when the largest lender mopped up $300 million.

Against an initial guidance of 4.125 per cent, the bank has been able to get a final pricing of 3.7 per cent, the arrangers said. Major investors who have subscribed to the issue include Fidelity, BlackRock and Singapore’s GIC.

The overall order book stands at $4 billion as of now, they said, adding there is good possibility of the lender mopping-up the entire targeted amount.

G-SAP plan

The Reserve Bank of India (RBI) on Wednesday said it will conduct an open market purchase of government securities of Rs 25,000 crore on August 26, under the G-sec Acquisition Programme (G-SAP 2.0).

Earlier this month, RBI governor Shaktikanta Das had said the RBI’s secondary market G-sec Acquisition Programme (G-SAP) has been successful in anchoring yield expectations while eliciting keen response from market participants.