ICICI Bank to raise RMB500 million

ICICI Bank Ltd, India's largest private sector bank, has turned to using the renminbi to tap Asia's rich bond market.

ICICI plans to raise RMB500 million through a renminbi bond that will be open for subscription. The final guidance for its three year bond is set at 4.9% with Standard Chartered Bank managing the transaction.

Standard & Poor's Ratings Services has assigned a "BBB-" rating to the proposed issue of renminbi-denominated senior unsecured notes. The rating on the notes reflects the long-term counterparty credit rating on the bank.

Indian lenders are tapping into the Asian bond market to raise funds at cheaper cost and to gain access to new investors.

If ICICI Bank chooses to swap the entire issue into US dollars the cost will be 255 basis point above three-month Libor, which is at 0.38%, said an industry source.