"The bank is issuing Basel III compliant additional tier-I bonds of Rs 500 crore on private placement basis," it said in a regulatory filing.
The bank will offer a coupon rate of 10.28 per cent per annum on the bonds.
The bonds have been rated stable by India Ratings and negative by Crisil.
These bonds are in the nature of perpetual bonds, meaning there is no maturity period. They are not redeemable and can be treated as equity, not debt.
In a separate filing, Union Bank said it will raise Rs 250 crore by issuing additional tier-I Basel III compliant bonds.
The bank said the bonds will be issued in favour of Prime Minister's National Relief Fund.
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