Canara Bank is planning to raise up to Rs 4,500 crore through Basel III-compliant additional tier 1 (AT-1) bonds, it said on Thursday. This is part of the board-approved fundraising proposal to mobilise up to Rs 4,500 crore through AT-1 bonds and Rs 4,000 crore through Tier 2 bonds.
“The proposed AT-1 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,” a release said.
The proposed bond issuance is expected to be offered via the electronic bidding platform of the NSE on September 16, from 12:00 p.m. to 1:00 p.m. It is anticipated to generate strong interest among investors, with the market expecting a coupon rate of 7.85%-7.90%.
These bonds will be perpetual debt instruments with a call option of 5 years, subject to regulatory clearance. They have been rated “AA+; Stable” by ICRA Ratings and “AA+; Stable” by India Ratings, the release said.
Currently, Canara Bank is on track to achieve a business size of Rs 30 lakh crore, backed by growth in deposits and advances across the retail, agriculture, MSME and corporate segments. The bank has mobilised $5.80 billion through the FCNR(B) swap facility.