This is the second debt raising by the city-based lender this year after it had raised SGD 225 million early January in a seven-year bond sale programme through its Dubai branch offering a coupon of 3.65 percent. The bond was sold denominated in Singapore dollars.

"We have launched a US dollar-denominated Reg S benchmark bond sale programme for ICICI Bank with an initial price guidance of 375 bps above the US treasury," one of the merchant bankers said. A US dollar-denominated benchmark bond issue can be to the tune of USD 500 million and above, while a Singapore-marked could be of SGD 250 million and a Hong Kong sale could be HKD 300 million.

ICICI's January issue was oversubscribed by over 13 times, which was lead-arranged by StanChart. Last fiscal, ICICI had hit the market five times raising USD 1 billion in two instalments of USD 750 million and USD 250 million, respectively. The bank had also raised a 1 billion yuan bond earlier in 2012 apart from a 100 million Swiss franc bond.

The domestic corporates have been raising funds from overseas bond market in an unprecedented manner following high interest rate in the country.

So far this calendar year, corporates like Reliance, Bharti Airtel, ICICI Bank, HDFC Bank, Exim Bank, Tata Communications, Union Bank, among others, had lapped up over USD 13.5 billion through overseas bond issues between January and mid-May.

But since late May the appetite for overseas debt had almost evaporated as cost of funds jumped in overseas markets following the US Fed's indication in late May to wind down its USD 85 billion monthly bond buying programme earlier than expected.

Between June and October there was just one issue from the country when HDFC Bank raised USD 500 million from overseas bonds on October 24 as part of its USD 2-billion medium-term bonds sale plan. The bank sold the debt at 3 per cent for a three-year unsecured senior bonds (RegS).

Against this, in the entire 2012, domestic companies had raised a little over USD 10 billion.The HDFC issue indicates the revival of the corporate interest in raising funds from abroad as they probably don't see any possibility of domestic interest rates coming down any time soon.

Regulation S bonds or RegS bonds are those offered to non-US residents and qualified institutional buyers (under an exception to US securities laws enacted in 1990) and do not enjoy the same legal protection as other issues do.

PTI