India's Yes Bank, two other peers withdraw dollar debt plan, bankers say

Yes Bank

25/08/2026 10:28

By Dharamraj Dhutia and Khushi Malhotra
MUMBAI, Aug 25 (Reuters) - India's Yes Bank YESB.NS has withdrawn a plan to raise U.S. dollar debt after investors demanded higher yields amid a wave of supply from Indian lenders, three merchant bankers said on Tuesday. 
Yes Bank, which is 24.9% owned by Japan's Sumitomo Mitsui Banking Corp, had planned to raise around $500 million through three-year dollar bonds, and had appointed bankers for the issue last week. 
"After the central bank advanced the closure of the dollar deposit window, there has been a sudden rush, prompting investors to seek yields 30-40 basis points higher than normal," one of the bankers said.
The bankers requested anonymity as they are not authorised to speak to the media. Yes Bank did not reply to a Reuters email seeking clarification. 
Banks have been scrambling to complete their dollar bond sales, with most of the proceeds expected to be used to provide leverage to customers who will deposit them under the Reserve Bank of India's discounted dollar deposit scheme. The window for hedging such deposits closes on August 31.
Market intelligence firm CreditSights had placed fair value for the proposed notes at a spread of 170-180 bps over U.S. Treasuries, implying a yield of about 6.0350%-6.1350%.
"From a fundamental perspective, related to Indian private sector banks, we see Axis Bank as the closest competitor and see fair value for YES Bank at a spread of 75 bps," it said in a note.
Investors were demanding yields at a spread of 200 bps above Treasuries, bankers added.
The lender had last tapped the dollar debt market in 2018, when it had raised $600 million through five-year securities, while it had written off perpetual bonds worth more than 84 billion rupees ($878.75 million) in the domestic market, denting investor confidence. 

PEERS HIT PAUSE 
Two other mid-sized private lenders, Federal Bank FED.NS and RBL Bank RATB.NS, have also shelved their planned dollar bond issuances, the bankers added. 
Both lenders were considering a benchmark $500 million debt issue, they added.
"Banks do not have enough time for disclosures for the public route, and private placement has become very expensive, so it makes sense to hold borrowings for now," another banker said. 
Neither lender replied to Reuters emails seeking comment. 



($1 = 95.5900 Indian rupees)

 (Reporting by Dharamraj Dhutia and Khushi Malhotra; Editing by Eileen Soreng)
 ((Dharamraj.Dhutia@thomsonreuters.com;))