Public sector lender Canara Bank has mobilised ₹1,500 crore in Basel III-Compliant Additional Tier 1 (AT1) bonds Series II, at a coupon rate of 8.05% per annum.
The issue received an overwhelming response from investors, with bids for more than ₹4,699 crore against a base issue size of ₹500 crore. Based on the response, the Bank has decided to accept ₹1,500 crore at a coupon rate of 8.05% per annum, according to a statement.
The AT1 instrument is perpetual in nature. However, the issuer can call back after five years or any anniversary date thereafter.
The Bank’s AT1 bonds are rated AA+ by CRISIL and India Ratings & Research Ltd.
This is the Second AT1 bond issuance of the Bank post the new SEBI regulations, During October 2021 bank has raised Basel III Compliant Additional Tier I bonds of ₹1,500 crore.
The Bank’s CRAR stood at 14.37% as of September 30, 2021 as compared to 12.77% as of September 30, 2020. The Bank had raised QIP to the tune of ₹2,500 crore during Q2FY22.
Canara Bank had indicated that its capital raising plans for FY22 included ₹4,000 crore via AT1 bonds and ₹2,500 crore in Tier 2 bonds.