First-of-its-kind Rated Paper Issuance by a Microfinance Institution (MFI) in India lead managed and arranged by YES BANK

Hyderabad - March 05, 2009 :YES BANK, India's new age private sector Bank, today announced that it has subscribed to INR 250 million of rated Non Convertible Debentures (NCD) issued by SKS Microfinance, India's largest and the world's fastest growing microfinance institution. The bond has a tenor of one year from the date of allotment with a coupon rate of 10.50% per annum. YES BANK was the lead manger to the issue - a first of its kind issuance of rated paper by an Indian MFI.

On successful completion of the transaction, Mr. Suresh Gurumani, MD & CEO of SKS Microfinance said, "SKS is the only MFI in the country to raise funds through non-Convertible Debenture. The funds will be utilised to provide financial services to a larger section of the poor. "

Somak Ghosh, Group President, Corporate Finance and Development Banking, YES BANK, on fully subscribing to the issue said, "YES BANK's microfinance initiatives/approach/focus is centred on using structured capital market products to provide MFIs access to a broader base of investors and lenders thus reducing cost of funds and lowering transaction costs for the sector. The successful closure of SKS's rated bond issue is the fruition of such efforts at YES BANK and SKS Microfinance and will help the MFI tap sophisticated capital market investors opening up additional, cost-effective sources of funds.

Announcing this landmark transaction, Mr. S. Dilli Raj, CFO of SKS Microfinance said, "SKS becomes the first Indian MFI to issue a rated bond. This showcases SKS's structuring and financial innovation skills. The fact that the Bond is a stand alone issuance with no credit enhancement in the form of any 3rd party guarantee or collateral speaks volumes of SKS's Balance Sheet strength."

Microfinance has been recognized as an efficient poverty alleviation intervention, its expansion in India is significantly impeded by its relatively limited access to capital markets resulting in MFIs continuing to face challenges of high cost of funds. YES BANK innovative structured solutions at reasonable costs allow for broad basing financing opportunities to such institutional groups.

About YES BANK

YES BANK, India's new age private sector Bank, is the outcome of the professional & entrepreneurial commitment of its top management team, to establish a high quality, customer centric, service driven,  private Indian Bank catering to an Emerging India.

YES BANK has adopted international best practices, the highest standards of service quality and operational excellence, and offers comprehensive banking and financial solutions to all its valued customers. A key strength and differentiating feature of YES BANK is its knowledge driven approach to banking, and a superior customer experience for its retail, corporate and emerging corporate banking clients.

YES BANK is steadily building corporate and institutional banking, financial markets, investment banking, corporate finance, business (SME) and transactional banking, retail banking and wealth management business lines across the country.  The Bank's constant endeavour is to provide a consistent banking experience expressed with simplicity, empathy and totality.

About SKS Microfinance

SKS Microfinance is a non-bank finance company (NBFC) whose mission is to eradicate poverty by providing financial services to the poor. Established in 1998, SKS Microfinance is India's largest and one of the world's fastest growing microfinance organizations with an annual growth rate of 200 per cent. It currently serves 3.6 million clients across 60,000 villages and slums in 18 states and has disbursed Rs. 5,788 Crore in loans with a 99 % repayment rate. SKS also provides life and health insurance to its clients.