Union Bank of India has hit the global debt market to raise around USD 500 million through bond issuance, said two merchant bankers working on the issue. This has comes days after successful bond issuances by State Bank of India last week and a dozen of corporates in recent months.
“We have launched roadshows in the leading Asian and European finance centres on behalf of Union Bank of India last week, as part of the bank's pan to launch a benchmark issue. If the market condition is conducive, we will close the sale programme this week,” the merchant bankers told PTI on Monday.
They also said, this is part of the medium term note (MTN) programme of the city-based bank and the fund will be deployed to meet its overseas fund obligations. The bank's head D Sarkar could not be reached for comments immediately.
It can be noted that last Friday, SBI set a new benchmark in bond pricing by selling USD 1 billion worth fixed rate five-year senior unsecured bonds at coupon 3.25 percent, 87 basis points (bps) lower than the coupon it is paying to the bondholders of its previous USD 1.25-billion issue last July. So far 11 companies through 13 issuances raised a whopping USD 7.5 billion this year, as rupee funds remain too costly at around 12-14 per cent, while foreign funds are much lower.
The highest pricing of these debts is just under 6 percent, while the lowest coupon is a paltry 3 percent that HDFC Bank is paying to its investors for its USD 500 million issue sold this January.
Union Bank stock price
On November 27, 2015, Union Bank of India closed at Rs 168.20, up Rs 7.95, or 4.96 percent. The 52-week high of the share was Rs 253.50 and the 52-week low was Rs 129.80.
The company's trailing 12-month (TTM) EPS was at Rs 27.98 per share as per the quarter ended September 2015. The stock's price-to-earnings (P/E) ratio was 6.01. The latest book value of the company is Rs 267.48 per share. At current value, the price-to-book value of the company is 0.63.
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