1. Union Bank raises Rs 500 crore to boost core capital

Union Bank raises Rs 500 crore to boost core capital

Public lender Union Bank has raised Rs 500 crore by issuing Basel III compliant bonds, a step that will add to its core tier-I capital.

By: | New Delhi | Published: May 3, 2017 7:22 PM
The bonds will carry a coupon rate of 9.08 per cent payable annually. (PTI)

Public lender Union Bank has raised Rs 500 crore by issuing Basel III compliant bonds, a step that will add to its core tier-I capital. Union Bank said it has issued 5,000 non-convertible, unsecured subordinated Basel III compliant perpetual bonds today to be included as additional tier-1 capital.

“The bond is issued for face value of Rs 10 lakh each at par aggregating Rs 500 crore on private placement basis,” it said in a regulatory filing. Perpetual bonds are treated as equity than debt and so, they do not carry any maturity date.

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The bonds will carry a coupon rate of 9.08 per cent payable annually. The Mumbai-headquartered Union Bank’s board of directors had approved the capital plan for 2017-18 on April 28. It had announced raising up to Rs 6,350 crore this fiscal in the form of core equity capital and/or additional tier I or tier II bonds for the current fiscal.

Besides, the lender has planned to raise up to Rs 4,950 crore through follow-on public offer, rights and private issue, including qualified institutional placement or preferential allotment to the government. The stock closed 4.75 per cent up at Rs 178.60 on the BSE.

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