Union Bank of India to raise up to Rs 1,150 cr by issuing bonds

Union Bank of India on Thursday said it has accepted bids to raise up to Rs 1,150 crore by issuing Basel III-compliant bonds.

The bank is issuing Basel III-compliant debt instruments in the nature of debentures eligible for inclusion in tier 2 capital of Rs 500 crore with green shoe option of up to Rs 650 crore on private placement basis, Union Bank of India said in a regulatory filing.

It will allot the bonds on July 9, 2021.

The bonds with tenor of 15 years carry coupon rate of 7.25 per cent per annum, it said.

The redemption date is set as July 9, 2036.

To comply with Basel-III capital regulations, banks globally need to improve and strengthen their capital planning processes.

These norms are being implemented to mitigate concerns on potential stresses on asset quality and consequential impact on performance and profitability of banks.

Stock of the bank closed 2.24 per cent down at Rs 37.05 on BSE.