India's Punjab National Bank eyes debut dollar bond issue, bankers say

Bank of Maharashtra

09/10/2026 04:05

By Dharamraj Dhutia
MUMBAI, Oct 9 (Reuters) - One of India's largest state-run lenders, Punjab National Bank PNBK.NS, is set to tap the US dollar-denominated debt market through a debut issue in the coming weeks under the central bank's discounted swap window, two merchant bankers said on Friday.
Punjab National Bank is eyeing at least $500 million through a 5-year bond issue, and if rates are favorable and demand is strong, it could raise up to $1 billion, the bankers added.
The bankers requested anonymity as the matter is still private, while the lender did not respond to a Reuters request for comment outside business hours.
"PNB was supposed to tap the market in late September or early October, but may have delayed the exercise due to a sudden spike in Treasury yields," one of the bankers said.
The bonds would be sold under the discounted swap window, after the Reserve Bank of India allowed banks and state-run companies to raise funds overseas and access a subsidised hedging facility lowering the cost of managing currency risk since June.
The window is available until the end of December, and another state-run lender, Canara Bank CNBK.NS, is also looking to tap the dollar debt market.
In September, PNB filed a $1.5 billion medium-term note programme, a precursor to the fundraising exercise.
Moody's and Fitch Ratings have assigned Baa3 and BBB- ratings to the lender's notes, in line with the issuer's rating.     
Indian lenders have already raised $13 billion through dollar bonds since the central bank announced the discounted scheme, with five state-run banks raising an aggregate of $3.5 billion through a combination of private placement and public issues.
State Bank of India SBI.NS, Bank of Baroda BOB.NS, Union Bank of India UNBK.NS, and Bank of Maharashtra BMBK.NS are among the state-run peers that have used this route to raise cheaper funding.
     

 (Reporting by Dharamraj Dhutia; Editing by Rashmi Aich)
 ((DharamrajLalit.Dhutia@thomsonreuters.com;))