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Source: The Hindu BusinessLine
Canara Bank plans up to ₹4,500 crore in perpetual bonds
Canara Bank plans to raise as much as ₹4,500 crore through Basel III perpetual bonds. The bank had issued ₹3,500 crore of perpetual bonds last year, with a coupon of 7.55%.
The proposed fundraising puts the focus on Canara Bank’s next bond issue. The ₹4,500-crore figure is an upper limit, not a statement that the bank has already collected that amount. The supplied report does not state how much will ultimately be raised or when the issue will take place.
Last year’s perpetual bond issue provides a comparison for the planned exercise. At the stated maximum, the new fundraising would be ₹1,000 crore larger than that earlier issue. However, the difference is between the proposed ceiling this time and the reported size of last year’s issue, rather than between two completed fundraisings.
The earlier bonds carried a 7.55% coupon, but the report does not give a coupon for the proposed issue. Readers should therefore not treat last year’s rate as the rate for the upcoming bonds. Beyond identifying the planned instruments as Basel III perpetual bonds, the supplied information does not spell out the new issue’s detailed terms.