The Bank of India plans to raise up to Rs 1,800 crore through Tier-II non-convertible debentures (NCDs) that comply with Basel III, with a maturity of 10 years.
NCDs will have a base issue of Rs 1,000 crore, with an over-subscription retention option of Rs 800 crore. “The date of the tender has not yet been set, but the probable date is September 28 or 29,” said an arranger familiar with the matter.
Market participants said the bank had set a five-year call option on Tier-II Basel III compliant CRSs. Crisil and Infomerics Ratings assigned “AA +” and “AAA” respectively, with a “stable” outlook on September 21.
“Bank of India’s proposed additional Basel III Compliant Level II bond ratings take into consideration sovereign ownership with continued support,” Infomerics said in a statement.
On April 30, the bank, in a notice to the exchanges, said the board of directors had approved the issuance of new capital in the form of follow-on public offerings or qualified institutional placement, and additional Level I compliant. at Basel-III (AT1) bonds (national and foreign currencies) up to an amount of Rs 3,000 crore. It also approved the issuance of Basel III compliant Tier-II bonds up to an amount of Rs 1,800 crore.
Meanwhile, HDFC Bank will also increase to Rs 5,000 crore on September 23 through seven-year MNTs.
Experts said banks have returned to the market due to increased appetite and lower rates. In addition, good investor demand is also attracting banks to the bond market.