Canara Bank plans to raise Rs 4,500 crore through AT-1 bonds next week
Canara Bank is set to raise up to ₹4,500 crore next week through the issuance of Basel III-compliant Additional Tier-1 (AT-1) bonds. The bonds are expected to carry a coupon rate between 7.85% and 7.90%. This issue forms a part of the bank's larger capital plan to raise ₹8,500 crore for the fiscal year, with plans for Tier 2 bonds to follow.
What this means
This capital raising initiative indicates Canara Bank's efforts to strengthen its capital adequacy ratio in line with Basel III norms and support future growth. The coupon rate offered will serve as a benchmark for other public sector banks looking to raise capital through AT-1 bonds. Successful issuance will provide the bank with crucial capital for business expansion.
Most affected: PSU Banks, Bond Markets
Key takeaway: Monitor the pricing and subscription success of Canara Bank's AT-1 bond issue as an indicator for future capital raising efforts by other public sector banks.
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