Union Bank of India (UBI) has raised ₹1,500 crore through issuing Basel III compliant debt instruments at a coupon rate of 8.40 per cent.
The issue size of the public sector bank’s debt issuance was ₹500 crore with a green shoe option to retain oversubscription up to ₹1,000 crore.
The debt instruments, which carry ₹1 crore face value, are like debentures eligible for inclusion in Additional Tier-1 Capital. The interest payment is annual.
The bank can exercise the call option on these instruments with prior approval of the Reserve Bank of India (RBI), subject to conditions mentioned in Term Sheet, on the fifth anniversary from the deemed date of allotment or any allotment anniversary date thereafter.
Last month, UBI had raised ₹2,000 crore via AT-1 bonds at a coupon rate of 8.70 per cent.