Bank of Baroda Raises $700 Million In Dollar Bonds At Tighter Spreads After 7 Years
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Bank of Baroda has raised $700 million via a two-part dollar bond issue. The fundraising represents the lender’s first dollar bond issue in seven years. The proceeds will be used for various funding requirements.
Bank of Baroda has accepted bids worth $700 million through a dual-tranche dollar-denominated bond issue on 14 August 2026. The lender raised $400 million through three-year bonds and another $300 million through five-year bonds.
The bonds were priced at spreads of 90 basis points and 100 basis points over US Treasuries, respectively. Both spreads were 30 basis points below the bank's initial guidance.
The three-year bonds carry a 5.1140% coupon, while the five-year bonds have a 5.3180% coupon. Interest on both securities will be paid semi-annually.
The bonds have been assigned ratings of BBB, BBB- and BBB+ by S&P, Fitch Ratings and CareEdge Ratings, respectively. These ratings are consistent with Bank of Baroda’s issuer credit ratings.
What Does The Dollar Bond Issue Mean For Bank of Baroda?
Bank of Baroda is returning to the dollar bond market for the first time in seven years, amid a broader trend of Indian banks increasingly looking overseas for funding following a new Reserve Bank of India (RBI) swap facility introduced in June.
The facility has made foreign-currency borrowing more cost-effective for banks.
Bank of Baroda is India's second-largest state-run lender by assets. The latest issue also comes after State Bank of India (SBI) raised $500 million through five-year dollar bonds earlier in the week.
SBI's bonds carried a 5.25% coupon and were priced at an 88-basis-point spread (bps) over Treasuries, compared with its initial guidance of 120 bps.
How Are Indian Banks Accessing The Dollar Bond Market?
The recent borrowing activity extends beyond state-run lenders. HDFC Bank, Axis Bank and ICICI Bank have also raised funds through dollar bonds at spreads below their respective initial guidance.
CreditSights estimates that Bank of Baroda's notes have a fair value of around 5 bps below SBI's paper. The assessment is based on the two banks having similar credit metrics and benefiting from support from the central government.
The proceeds will be used for various funding requirements of Bank of Baroda. The tighter pricing also comes amid a wider trend of Indian banks raising overseas funds at narrower spreads than their initial guidance.
Bank of Baroda Share Price Today
At 11:50 am on 14 August 2026, Bank of Baroda shares were trading at ₹249.21 on the National Stock Exchange (NSE). The stock opened at ₹248.00 and had touched an intraday high of ₹250.79 since the market opened.
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Vishwa is a content and SEO strategist with 10+ years of experience across fintech and FMCG. She has a knack for connecting dots others miss, spotting trends early, and finding angles on topics most miss to question.
At Kotak Neo, she drives content strategy for neoshorts, Kotak News Desk, and Investing Guide.
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