The Hindu Business Line : PNB plans perpetual bond issue

Punjab National Bank (PNB) plans to raise Rs 300 crore through tier-I perpetual bonds on private placement basis this week, taking the overall amount mobilised in the current fiscal through this route to Rs 1,100 crore.

The bank had raised Rs 500 crore through perpetual tier-I bonds in July 2007 at an annual coupon rate of 10.4 per cent. In December 2007, PNB had raised another Rs 300 crore through the same instrument, the annual borrowing cost for such bonds being lower than the 10 per cent level.

“I have told my treasury to raise tier-I bonds or tier-II capital, wherever there is room to do so, and the market conditions are appropriate. They will decide the quantum and timing of the bonds. But, at the moment, I have no plans to raise capital through pure equity during this fiscal,” Dr K.C. Chakrabarty, Chairman and Managing Director, PNB, told Business Line.

Dr Chakrabarty has been taking a stance that Government equity in the bank would not be reduced during the current fiscal. As at end-September 2007, the Centre had 57.80 per cent stake in PNB. He added that the bank would use the bond route to raise capital to fund business growth.

The proposed Rs 300-crore tier-I perpetual bond offering, which opens on January 16, would include green shoe option of Rs 50 crore, PNB officials said.

More Stories on : Corporate Bonds | Public Sector Banks | Punjab National Bank

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