India’s largest private lender, HDFC Bank Ltd, has raised $750 million through five-year dollar-denominated bonds at a fine pricing of 90 basis points over the benchmark US Treasury yield, seeking to fund its growing foreign operations, among others, according to a term sheet seen by Mint.
The joint global coordinators and joint lead managers for this transaction were BofA Securities, Citigroup, HSBC (B&D), J.P. Morgan, Mashreq, MUFG, and Standard Chartered Bank.
Spokespeople for Citi, Mashreq, MUFG and HSBC declined to comment. Others did not respond to emails seeking comments.
The tight pricing comes nine months after State Bank of India raised $500 million through a five-year dollar bond in September 2025 at a spread of 75 basis points over US Treasuries. This was described at the time as the tightest spread achieved by any Indian issuer, as reported previously by Mint. SBI's fundraise followed S&P's upgrade of India's sovereign rating.
Governance review continues
HDFC Bank’s fine pricing comes as the bank battles controversies over preferential deposit pricing, months after its then-chairman, Atanu Chakraborty, abruptly exited.
In March, the bank had appointed law firms Trilegal and Wadia Ghandy & Co. to review the minutes of the board meetings and determine whether there were any discrepancies that Chakraborty had pointed out but did not elaborate on. Mint reported in June that a US-based law firm was also appointed by the board, and the report has been delayed as the global firm is yet to finalize its findings.
Meanwhile, per the term sheet, the proceeds would meet the funding requirements of the bank's foreign branches and subsidiaries, support the development and expansion of its overseas business, and serve general corporate purposes.
The five-year bonds have a coupon of 5.067% or 90 bps above the yield on the benchmark US Treasury note due May 2031.
Earlier in June, RBI announced it would provide a concessional forex swap facility for ECBs raised by public sector undertakings and banks until 31 December 2026 for a maximum tenor of five years. Under the scheme, the central bank will effectively bear the full cost of hedging the dollar exposure, allowing borrowers to access overseas funds at significantly lower overall costs.
The transaction was formally disclosed by HDFC Bank late on Tuesday evening. In a regulatory filing, the lender said its Gift City IFSC Banking Unit had completed the issuance of $750 million senior unsecured bonds on 16 June. The bank said the notes are expected to be rated Baa3 by Moody's and BBB by S&P, and will be listed on India International Exchange (India INX) and NSE International Exchange (NSE IX).
To be sure, even as the crisis at HDFC Bank unfolded, the central bank has stood firmly behind HDFC Bank. In a statement after Chakraborty’s resignation, RBI had said, “There are no material concerns on record as regards its conduct or governance”. Deputy governor Swaminathan J. said in April that any individual supervisory concerns, as and when it arises, are dealt with on an ongoing, specific basis.
