Bank of India suspends issuance of overseas bonds

Volatile market conditions prompted lender to defer plans of raising $500 million by selling five-year bonds.

This move made Bank of India the second Indian lender in less than a week to end an international roadshow without a deal.

This follows Bank of Baroda's decision Friday to pull out a planned $300 million to $500 million bond offering as yields on emerging-market corporate bonds increased in a global shift away from risk.

"Secondary-market yields on Indian banks have moved up a fair bit over the past week, and the primary issuance premium that investors would demand has almost doubled," an investment banker involved in both deals told Dow Jones Newswires, asking not to be named. "It would have been madness to go ahead with a deal now."

The banker said neither issuer was in a hurry to raise funds.

The state-run lender had completed a promotional program for bond investors in London Monday, and had planned to raise up to $500 million by selling five-year bonds, another person said, but asked not to be named.

View the full story in the Wall Street Journal.