SBI raises US$637M in AT-I bonds at 7.75%, FY27's first bank issuance
What's the deal? State Bank of IndiaDealroom has a profile for this one. Try Dealroom → (SBI), the country's largest lender, raised US$637M through additional tier-I (AT-I) bonds at a cut-off yield of 7.75%. It marks the first perpetual bond issuance by a bank in the current financial year (FY27).
The details: The issue had a base size of US$407.4M and a total size of US$679M. SBI received 89 bids — more than twice the base — from provident funds, pension funds, mutual funds, and banks, and retained US$637M at a coupon rate of 7.75%, payable annually.
The bonds are perpetual, with a call option after five years and on every anniversary thereafter. They carry an AA+ rating with a stable outlook from CRISIL Ratings and CARE RatingsDealroom has a profile for this one. Try Dealroom →.
What's the endgame? AT-I bonds qualify as additional tier-I capital under Basel III norms and are designed to absorb losses during financial stress. SBI said the issuance lets it diversify funding and raise long-term regulatory capital without diluting equity shareholders.
This is one slice of a larger plan. In June 2026 SBI announced it would raise up to US$8.15B through debt instruments in FY27, spanning long-term bonds, AT-I bonds, and tier-II bonds via public issues or private placements.
Why now? Lenders are preparing for higher capital requirements over the medium term. Banks need extra capital for the phased rollout of the Reserve Bank of India's Expected Credit Loss framework and evolving Basel rules — and AT-I bonds provide perpetual capital without touching equity.
What could go wrong? Unlike conventional debt, these bonds have no fixed maturity, and their loss-absorption features make them riskier than standard bank bonds.
The signal: The response — a heterogeneous mix of institutional bidders and demand above twice the base — points to investor confidence in India's biggest bank as it builds a capital buffer ahead of tighter regulation. In FY26, SBI raised US$1.84B in tier-II bonds and US$3.4B via a qualified institutional placement, the largest in Indian capital market history.
Read more: Business Standard
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