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    Question

    SBI’s recent (Oct 2024) ₹5,000 crore bond issuance

    had a coupon rate of ______. 
    A 7.98% Correct Answer Incorrect Answer
    B 8.5% Correct Answer Incorrect Answer
    C 6.75% Correct Answer Incorrect Answer
    D 9.25% Correct Answer Incorrect Answer
    E 7.5% Correct Answer Incorrect Answer

    Solution

    State Bank of India (SBI) raised Rs 5,000 crore through the issuance of Additional Tier-I (AT-I) bonds at a coupon rate of 7.98 per cent to bolster its capital base, marking the lender's first such issuance in the current financial year . The coupon rate is the rate of interest that the bank will pay to investors. The bonds have a call option exercisable after 10 years. AT-1 bonds are debt instruments that are issued by banks to raise money and shore up the capital base. The AT-I bond issue had a base size of Rs 2,000 crore, with a greenshoe option for an additional Rs 3,000 crore. They have been rated ‘AA+’ by Crisil Ratings.

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