Union Bank of India taps dollar debt market after 12-year hiatus

Union Bank of India has
accepted bids worth $600 million for ​a public sale of US
dollar-denominated bonds through its ‌Dubai branch, its first
such issuance in ​more than 12 years, two merchant ⁠bankers said
on Tuesday.

The bank raised $300 million each through three-year and
five-year papers at a coupon of 5.23 per cent ‌and 5.4170 per cent, respectively,
the lender said in a notice to stock exchanges.

The three-year ‌bonds were priced at 93 basis points ‌above
US ⁠Treasuries, while the five-year tenor is ⁠priced at 102 bps
above Treasuries, sharply below the bank’s initial guidance of
120 bps and 130 bps.

The lender ​is the third state-run ‌bank to tap the dollar
debt market through the public route since June, when the
central bank announced a discounted hedging facility that ‌lowers
the cost of borrowing for financial ​institutions.

India’s top two state-run lenders, State Bank of India
and Bank of Baroda, ⁠have raised $500 million
and $700 million, respectively, through a public sale, with the
former also adding $600 million through ‌the private route.

Separately, IDFC First Bank also raised $350
million through a private placement of five-year securities
through its GIFT City branch, a week after the lender raised
$600 million through three-year debt.

Banks have been scrambling to complete their ‌dollar
issuances, with most funds being used to provide ​leverage to
customers who will deposit them under the RBI’s discounted
dollar deposit scheme.

Earlier this ⁠month, the RBI said the window provided to
banks ⁠for hedging non-resident deposits would end a month early,
on August 31.

The rush ‌has prompted a wave of offshore fundraising by
Indian lenders, which raised $11.25 billion through bond
issuances ​from June to August.

Published on August 25, 2026