Canara Bank likely to issue perpetual bonds in Dec: bankers

Mumbai: India's Canara Bank is likely to raise funds through the issuance of Basel III compliant additional Tier I perpetual bonds this month, which would be its first such issue in more than a year, three merchant bankers said on Friday.

The state-run lender may look to raise around 20 billion rupees ($240.06 million) to 30 billion rupees via the bonds and may invite bids in the middle of December, the bankers added.

The issue is likely to have a call option at end of five years.

The bank has yet to announce the bond issue and did not respond to a Reuters' email seeking comment.

No lender has raised funds through perpetual bonds in the current quarter.

Punjab National Bank had sold 30 billion rupees through this route in September at 8.59% coupon.

Canara Bank had last raised 20 billion rupees in September 2022 through additional Tier I perpetual bonds at 7.99% coupon.

The lender had also raised 100 billion rupees through two issuances of infrastructure bonds maturing in 10 years in September and November.