ICICI Bank has raised funds from its Bahrain branch, picking up about $750mn or about Rs 3,490 crore through a fixed rate note issue. The notes will carry a fixed rate of 5.5% which is 293 basis points over the London Inter-Bank Offered Rate (Libor). According to the bank, the issue got a good acceptance with bids of over $3bn. The bank has not mentioned any specific reason for raising these funds.
During a conference call with analysts after its September 2009 results, the bank said that margins are down in its international lending books, due to an increase in the funding costs, even as lending rates have not gone up. Demand for loans has also been flat. Thus, this fund raising could be to either replace some of its existing borrowings or in anticipation of an improvement in demand for funds.
Read the announcement to the BSE here.