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M. Ramesh

Chennai March 21 Life Insurance Corporation of India has invested Rs 300 crore in long-term bonds of Vijaya Bank. The bonds are of a tenor of 15 years and carry an interest rate of 10.10 per cent. Both parties have an option to return or call for return of the bonds after 10 years.

When contacted by Business Line, the Vijaya Bank's Executive Director, Mr T. Valliappan, confirmed the development and said that with this, the bank's capital adequacy ratio would rise to 11.58 per cent. The bank had still headroom to raise another Rs 1,400 crore. It will take a call on that next year. "We are comfortably placed. As of now, there is no need for additional funds," he said.

It is understood that HSBC were the arrangers for the bond issue. Mr Valliappan said that Vijaya Bank would hedge the bonds and was examining options for hedging the bonds.

More Stories on : Corporate Bonds | Life Insurance | Public Sector Banks

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