The State Bank of India is likely to float a second offering of its medium-term notes foreign currency bonds in next financial year to fund its operation of overseas offices.

The country's largest commercial bank concluded the first MTN offering for $400 million last week and next offering is likely to be some time after March 2005, senior SBI official said on Tuesday.

Asked about the size of the next issue, the official said the size would be fixed near to the issue time, based on assessment of requirement and the demand from investors.

The funds raised from MTN would be used for financing regular credit operations and retire high cost debt of the overseas offices, he added.

SBI has established $1 billion MTN programme and first tranche comprised of notes valued $400 million which is listed on Singapore Stock Exchange.

The first tranche of the five year medium term note issue was oversubscribed 3.5 times and a total 118 investors particpated in the offer with 50 per cent demand from Asia, Europe (41 per cent) and the rest from offshore US accounts.

MTN issue was rated Baa2 by Moody's and BB by Standard and Poor's. The rating by Moody's pierced India's sovereign rating of Baa3.