Canara Bank To Raise Up to Rs 4,500 Cr via Bonds

New Delhi: State-owned Canara Bank on Thursday announced raising up to Rs 4,500 crore through Basel III-compliant Additional Tier 1 (AT-1) bonds to fund business growth.

This offer of issuance is part of a capital-raising proposal, where the bank has been authorised by its Board of Directors to raise up to Rs 4,500 crore through AT-1 bonds and Rs 4,000 crore through Tier 2 bonds, Canara Bank said in a statement.

The proposed AT-1 bonds will be perpetual debt instruments with a call option of 5 years, subject to regulatory clearance.

The issuance of this bond is anticipated to generate much interest among investors, with market expectations for a coupon rate of 7.85-7.90 per cent.

The proposed capital raising comes at a time when Canara Bank continues to witness sustained growth across its key business segments, it said.

Currently, Canara Bank is on track to achieve a business size of Rs 30 lakh crore, backed by continuous growth in deposits and advances across the retail, agriculture, MSME & corporate segments, it said.

Canara Bank has also exhibited strong liability mobilisation and customer confidence in the recently announced FCNR(B) swap facility by the Reserve Bank of India, whereby the bank has been able to mobilise USD 5.80 billion, it said.

The strong mobilisation underscores the bank’s extensive domestic and international presence and the continued confidence of its customers, it said.

The proposed AT-1 bond issuance will further strengthen the bank’s capital position and provide additional headroom to support its business growth while maintaining a strong capital base and financial resilience, it added.

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