The borrowing was divided equally between two maturities. A $300 million three-year tranche carries a 5.23% coupon, while another $300 million, repayable over five years, carries a 5.4170% coupon. Strong investor demand helped the bank secure pricing below its initial guidance.

The three-year tranche was priced 93 basis points above US Treasury yields, against initial guidance of 120 basis points. For the five-year tranche, the spread narrowed from an indicated 130 basis points to 102. A basis point represents one-hundredth of a percentage point.

Union Bank became the third government-owned lender to raise dollar debt since June. SBI had secured $500 million through a public issue and $600 million privately, while Bank of Baroda raised $700 million. Among private banks, IDFC First Bank recently borrowed $350 million through its GIFT City branch.

The fundraising comes ahead of the early closure of the RBI’s discounted hedging window on August 31. This facility lowers the cost of protecting foreign-currency borrowing against exchange-rate movements, encouraging banks to complete deals before it ends.

Indian lenders raised $11.25 billion through such bond issues between June and August. Most of the proceeds are supporting customers looking to place funds under the RBI’s dollar deposit scheme.