ICICI eyes issuing of benchmark 10-Yr dollar bond

Analysts see more bond release from Indian banks investors are becoming more comfortable with Indian paper.

ICICI Bank Ltd. is seeking to sell a benchmark-sized 10-year dollar bond as early as Monday, a person familiar with the matter said Monday, marking the latest Indian borrower to look offshore for funds.

The proposed offering from ICICI--India's largest private lender--would be the first 10-year senior deal from an Indian bank to hit the international bond market, according to Nomura, a sign that investors are becoming more comfortable with Indian paper.

ICICI has hired Barclays PLC, Citigroup Inc. and Deutsche Bank AG as arrangers, the person familiar with the deal said.

It is seeking to pay a spread of 335 basis points over the comparable U.S. Treasury bond yield, compared with initial guidance of a spread of the low- to mid-300 basis points, the person said.

Analysts at Standard Chartered Bank said that spread reflects fair value, based on where ICICI's outstanding bonds maturing in 2015 and 2016 are trading.

Nomura analyst William Mak said the ICICI bond should perform well if it is priced at 310 basis points or more over the Treasury yield, noting it would be the first 10-year senior deal from an Indian bank and that "investors are extending duration in high quality names for higher all-in yield."

The ICICI plan comes after Reliance Industries Ltd. raised $1.5 billion in a sale of 10-year and 30-year bonds in mid-October.

View the full story in The Wall Street Journal.