Canara Bank to issue perpetual bonds, say traders

Canara Bank

India’s Canara Bank plans to raise at least 5 billion rupees ($62.87 million) through sale of Basel III-compliant additional Tier I perpetual bonds, three merchant bankers said on Monday.

The state-run bank has invited coupon and commitment bids from bankers and investors on Wednesday, they said.

The notes are rated AA+ by India Ratings and ICRA, and the issue will close for subscription later this week.

The issue has a call option at end of five years and will also have a greenshoe option to retain an additional 15 billion rupees.

In August, the lender had raised 20 billion rupees through sale of Basel III-compliant Tier II bonds maturing in 10 years at an annual coupon of 7.48%. This issue had a call option at end of five years.

($1 = 79.5250 Indian rupees)