State Bank of India (SBI) raised Rs 9,700 crore in its second infrastructure bond issue on Wednesday. The bond has a coupon rate of 7.7% per annum. The bonds have a maturity of 15 years. The issue received 118 bids.

SBI will use the proceeds to increase long-term resources to fund infrastructure and affordable housing sectors, SBI said in a release.

“The coupon rate of 7.7% per annum represents a spread of 17 basis points from the corresponding FBIL G-Sec coupon rate curve. Before this, the bank issued an infrastructure bond of Rs 1,000 crore on 6 December 2022, which is in line with the corresponding FBIL G-Sec coupon curve, which is 17 basis points apart. The bank has a ‘AAA’ credit rating for these instruments from domestic credit rating agencies,” the release said.

“Considering that this is the first time a 15-year long-term infrastructure bond has been issued by an Indian bank to help banks provide long-term loans to the infrastructure sector, this latest issue is significant. We believe this issue will help shape the long-term subprime bond curve and encourage banks to issue bonds with longer maturities,” it said.