State Bank of India’s SBI decision to widen its investor base and tap into alternative sources of liquidity showed brave, if not perverse, timing. The capital markets in Europe reacted negatively to the Ireland debt bailout, with stock prices falling and bond yields of riskier countries and companies rising. The cost of insuring both sovereign and corporate debt jumped at the beginning of the week.
Yet, SBI, India’s biggest commercial bank, priced a 750 million $951 million five-year senior bond issue on Monday evening, London time, after a three-day roadshow last week that included visits to investors in 10 European countries.
The deal was the largest ever Regulation-S bond which excludes onshore...
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