State-owned Canara Bank Ltd on Thursday said it will raise up to ₹4,500 crore through Basel III-compliant Additional Tier 1 bonds, as part of a capital-raising plan that also includes up to ₹4,000 crore through Tier 2 bonds. The bank's board has authorised the capital raising of up to ₹4,500 crore through AT-1 bonds and ₹4,000 crore through Tier 2 bonds.
The proposed AT-1 bonds will be perpetual debt instruments with a call option after five years, subject to regulatory clearance. The bonds have been rated “AA+; Stable” by ICRA Ratings and “AA+; Stable” by India Ratings. and 1:00 p.m. Market expectations for the coupon rate on the proposed issue are in the 7.85%-7.90% range.
The proposed capital raising comes at a time when Canara Bank continues to witness sustained growth across its key business segments. Currently, Canara Bank is on track to achieve a business size of ₹30 lakh crore, backed by continuous growth in deposits & advances across the retail, agriculture, MSME & corporate segments.
Canara Bank has also exhibited strong liability mobilisation and customer confidence in the recently announced FCNR swap facility by the Reserve Bank of India, whereby the Bank has been able to mobilise a sum of $5.80 billion.