The Hindu Business Line : Canara Bank to raise Rs 600 cr via bonds

Bangalore, Aug. 17 Canara Bank plans to raise Rs 600 crore, including a greenshoe option of Rs 200 crore, with an issue of non-convertible subordinated perpetual bonds – tier I (series II).

The funds would be used to strengthen the bank’s capital adequacy and also enhance its long-term resources, it said in a communication to the Bombay Stock Exchange.

These bonds will have a call option that may be exercised after the instrument has run for at least 10 years and with approval from the Reserve Bank of India. The coupon rate for the bonds would be 9.10 per cent per annum for the first 10 years, after which there is a step-up option to increase the coupon rate to 9.6 per cent, if the call option has not been exercised by the bank at the end of the tenth year from the deemed date of allotment.

The issue opens on Tuesday and closes August 21.

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