Bank of Baroda to raise up to Rs 2,000 cr via AT1 bonds today

2 years ago 460

The connection comprises a basal contented of Rs 500 crore with a greenshoe enactment to clasp oversubscription up to Rs 1,500 crore, according to the placement memorandum of the bank.

Last week, Union Bank of India raised Rs 2,000 crore via AT1 bonds astatine  an 8.70% coupon, and the contented   has seen afloat  subscription. All AT1 bonds were issued based connected  regulations amended by Sebi earlier this year.Last week, Union Bank of India raised Rs 2,000 crore via AT1 bonds astatine an 8.70% coupon, and the contented has seen afloat subscription. All AT1 bonds were issued based connected regulations amended by Sebi earlier this year.

Bank of Baroda, the country’s second-largest state-owned lender, is readying to rise Rs 2,000 crore done the issuance of Basel-III compliant Additional Tier-I (AT1) bonds connected Wednesday.

The connection comprises a basal contented of Rs 500 crore with a greenshoe enactment to clasp oversubscription up to Rs 1,500 crore, according to the placement memorandum of the bank.

Funds raised volition beryllium utilised for regular concern activities and are not meant for financing immoderate peculiar project. “The slope undertakes that proceeds of the contented shall not beryllium utilized for immoderate intent which whitethorn beryllium successful contravention of the regulations/ guidelines,” the slope said successful a notice.

AT1 bonds are types of perpetual indebtedness instruments that banks usage to augment their halfway equity basal and, thus, comply with Basel-III norms. The coupon connected the AT1 bonds volition beryllium acceptable during the bidding connected Wednesday connected the physics bidding level of the National Stock Exchange.

“We expect amended coupons connected our AT1 bonds compared to different banks which precocious raised funds done these securities,” slope officials said.

Market participants expect rates betwixt 7.95% and 8.05% connected Bank of Baroda’s bonds. The deemed day of allotment and pay-in day connected the bonds is November 26, portion the minimum bid batch size is Rs 1 crore with a bid worth measurement size of Rs 1 crore.

The bonds person been rated AA+ with a “stable” outlook by Crisil and Icra connected November 17 and November 12, respectively. The slope has appointed IDBI Trusteeship Services and KFin Technologies arsenic debenture trustee and registrar to the issue, respectively. The AT1 bonds person a telephone enactment aft 5 years.

Last week, Union Bank of India raised Rs 2,000 crore via AT1 bonds astatine an 8.70% coupon, and the contented has seen afloat subscription. All AT1 bonds were issued based connected regulations amended by Sebi earlier this year.

As per amended regulations, the residual maturity of the AT1 bonds is 10 years till March 31, 2022, and volition beryllium accrued to 20 and 30 years implicit the consequent six months. From April 2023, the maturity of these bonds volition go 100 years from the maturity date.

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