Yes Bank is preparing to return to the international bond market for the first time since the Indian private-sector lender wrote off a troubled local bond in 2020, according to a Bloomberg report citing people familiar with the matter.
The bank has appointed arrangers for a potential dollar bond issue and plans to sell a benchmark-sized three-year US dollar-denominated note. Yes Bank is scheduled to begin discussions with fixed-income investors from Monday, Bloomberg reported.
The proposed issuance comes as Indian banks have stepped up fundraising in overseas markets. Other lenders from the country have raised about $5.27 billion over the past two months, helped by measures introduced by the Reserve Bank of India in June to encourage capital inflows and support the rupee.
Yes Bank permanently wrote off its Additional Tier 1 (AT1) debt in March 2020. These securities count toward banks’ regulatory capital and are hybrid instruments that can be written down or written off when specified financial triggers are breached. The move came after Indian authorities took control of the lender as part of a rescue package, with State Bank of India leading a consortium that eventually bailed out the bank.
Gradual turnaround
Since the crisis, Yes Bank has undergone a gradual turnaround and strengthened its financial position. In 2025, the banking arm of Japan’s Sumitomo Mitsui Financial Group acquired an approximately 25% stake in Yes Bank, making it the lender’s largest shareholder.
The bank has also benefited from multiple upgrades to the ratings of its rupee-denominated debt securities in recent years.
Crisil Ratings upgraded Yes Bank’s rupee infrastructure bonds and Basel III-compliant Tier 2 debt to AA in August from AA-, citing a sustained improvement in the lender’s earnings profile. The securities had carried an A- rating at the beginning of 2023.
Yes Bank’s proposed dollar debt would enter the market with ratings below investment grade. Its existing dollar bonds are rated Ba1 by Moody’s Ratings and BB by S&P Global Ratings, both one notch below investment-grade status.
The planned issuance comes as India’s bond and loan markets have gained momentum, driven partly by strong dollar demand from domestic lenders seeking to increase their foreign-currency funding and leverage deposits raised from overseas Indians.
The fundraising drive follows the Reserve Bank of India’s efforts to attract capital from the country’s large overseas Indian community to help stabilize the rupee and strengthen foreign-exchange reserves.
Indian banks have attracted more than $50 billion from overseas citizens since June, prompting the central bank to shut a special window for foreign-currency deposits about a month earlier than initially planned. The surge highlights strong demand for foreign-currency funding among Indian lenders and comes as Yes Bank seeks to tap the international debt market once again.
