HDFC Bank prices $750 million bond in largest offshore deal by lenders since 2023

India’s biggest private sector bank, HDFC Bank, has received bids totalling $750 million for its upcoming dollar‑denominated bonds, taking advantage of the central bank’s subsidised hedging facility for foreign borrowers, according to three merchant bankers on Wednesday.

This transaction marks the biggest overseas bond issuance by an Indian bank since SBI’s $750 million five‑year bond offering in May 2023, and it follows similar plans by SBI and Bank of Baroda to tap foreign debt markets.

HDFC Bank set the coupon for its five‑year bond at 90 basis points above U.S. Treasuries, which corresponds to a yield of 5.067 %.

Initially guided at 120 basis points over Treasuries, strong investor interest tightened the spread, the bankers noted.

The sources requested anonymity because they are not authorised to speak with the press, and HDFC Bank did not respond to a Reuters request for comment.

Earlier this month, the RBI announced that external commercial borrowings by banks and state‑owned enterprises would be eligible for a subsidised hedging mechanism, reducing the expense of hedging currency exposure.

This measure is part of the RBI’s broader effort to attract dollar inflows and support the rupee.

‘When the hedging benefit is factored in, the bank’s all‑in funding cost is expected to be about 7 %,’ said one of the bankers.

Merchant bankers anticipate that the external commercial borrowing channel will attract inflows of roughly $15 billion to $20 billion over the next six months.

According to the term sheet cited by the bankers, the bond proceeds will support HDFC Bank’s overseas branches and subsidiaries, finance expansion of its offshore operations, and cover general corporate needs.

The bank also holds a call option, exercisable in August, on a perpetual bond it issued five years earlier.

Published on June 17, 2026