Monday, October 3, 2022

Union Bank of India to mop up Rs 1,320 crores by issuing bonds

Union Bank of India (UBI) on Friday said it will raise Rs 1,320 crore next week by issuing bonds on a private placement basis

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New Delhi: Union Bank of India (UBI) on Friday said it will raise Rs 1,320 crore next week by issuing bonds on a private placement basis.

The bank said it has accepted bids of Rs 1,320 crore in an issue of Rs 2,100 crore with a base issue size of Rs 600 crore and a green shoe option to retain oversubscription up to Rs 1,500 crore.

The unsecured, subordinated, taxable, non-convertible, perpetual, fully paid-up Basel III compliant additional tier I bonds in the nature of debentures will carry coupon at 8.69 per cent per annum, the state-owned lender said in a regulatory filing.

The fund raised will be eligible to be included as additional tier-I capital of the bank, it said.

Perpetual bonds carry no maturity date and they are often considered a type of equity, not debt. Even as such bonds are not redeemable, they pay a steady flow of interest forever.

The bank said it will allot bonds to the allottees on July 25, 2022.

Crisil Ratings and India Ratings & Research have rated these bonds as high investment grade AA rating with a stable outlook.

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