ICICI to raise up to $700 mn in international market

09 Jul 2010 Evaluate

ICICI Bank is planning to raise between $500 million and $700 million in the international market through a five and a half year bonds issue. The bonds are expected to be priced around 320 basis points over 5-year US treasuries. The proceeds will be used by ICICI Bank for general corporate purpose, in accordance with applicable rules and regulations.

 

ICICI Bank has appointed Bank of America Merrill Lynch, HSBC and Deutsche Bank to raise the money. International rating agency Moody’s has assigned a Baa2 rating to the dollar-denominated bonds. The rating is in line with existing ratings assigned to ICICI Bank’s foreign currency senior unsecured debt and is derived from its C-bank financial strength rating.

 

The rating also reflects the bank’s comfortable liquidity position, strong capitalisation levels, as well as its satisfactory recurring profitability driven by robust fee income comprising more than 36% of the bank’s total income during the fiscal ending March 2010.

 

Moody’s has taken into account the bank’s growth of 43.3% and 29.7% in current and savings accounts (CASA), respectively. CASA deposits accounted for 41.7% of the bank’s total deposits as of end-March 2010 compared with 28.7% one year previously.

 

As a result, ICICI Bank managed to marginally improve its net interest margin to 2.5%. The bank also registered a gross NPLs ratio of 5.06%, a net NPLs ratio of 2.09% and a capital adequacy ratio under Basel II of 19.4%, of which 14% was in the form of Tier-1 capital at the end of March 2010.crackcrack

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