Canara Bank to raise over ₹5,000 crore through 10-year bonds: Report
Canara Bank is reportedly planning to issue bonds worth ₹5,000 crore on November 24. Market experts suggest that these bonds, categorized as infrastructure bonds, will have a maturity period of 10 years, concluding on November 29, 2033. The initial issue size is set at ₹1,000 crore, with an option to retain oversubscription amounts up to ₹4,000 crore, making the total aggregate issuance ₹5,000 crore.
The pay-in date for the bonds is scheduled for November 29, signifying the day when the exchange of bonds and funds occurs between the issuers and investors. CARE Ratings and India Ratings have given ‘AAA’ ratings to the bonds. According to media reports, REC, earlier in the day, also raised ₹2,899.69 crore via 10-year bonds at 7.71 percent coupon.
A Moneycontrol report revealed REC Ltd's plan to issue two bonds totaling ₹6,000 crore on November 23. The company aims to collect ₹3,000 crore from each of the 10-year and two-and-a-half-year bonds, according to the report. Additionally, on November 21, the Indian Railway Finance Corporation successfully secured ₹2,404 crore through three-year bonds with a 7.68 percent interest rate.
In contrast, the Small Industries Development Bank of India raised ₹4,887 crore through five-year bonds carrying a 7.83 percent coupon. Bonds enable companies to secure significant funds at favorable interest rates for the purpose of investing in expansion and various projects. Additionally, bonds provide companies with increased operational flexibility compared to bank loans, which often entail more restrictive conditions.Milestone Alert!
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