UBI raises Rs 500 crore via Basel-3 compliant bonds

Written by fe Bureau | Kolkata | Updated: Jun 26 2013, 10:12am hrs
United Bank of India (UBI) has raised R500 crore through tier-2 bonds on Tuesday complying with the Basel-3 guidelines. Reserve Bank of India introduced the guidelines at the beginning of this fiscal.

UBI is first bank to come out with a Basel-3 compliant bond, Archana Bhargava, the chairman and managing director, said.

The issue, rated AA+ by Crisil and Brickwork, was at a coupon of 8.75% and subscribed by LIC. The non-convertible bonds are of 10-year tenor. It doesnt have any put or call options and can be traded in the wholesale debt market (WDM) segment of BSE.

Bhargava said the bank was putting all its efforts to improve upon assets quality through compliance of all regulatory guidelines.

Crisil said it assigned AA+ rating with a stable outlook showcasing the agencys continued commitment towards making markets function better and enabling innovation in domestic debt markets. The Basel-3 complaint capital instrument would also set in motion the other Indian banks towards tapping bond markets for banks capital requirement, Crisils senior director Pawan Agarwal said.

The rating took into account the strong support the bank gets from the government, the banks resource profile and capital adequacy.