Bank of Maharashtra raises Rs 200 crore under tier II bond programme

State-run Bank of Maharashtra on Monday said it has raised over Rs 200 crore through private placement of Basel III-compliant tier II bonds.

The fund raise is part of the lender's Rs 1,000 crore tier II bond programme.

"The bank has successfully raised a capital of Rs 200.70 crore through private placement of Basel III compliant tier II bonds, the lender said in a filing to exchanges.

The coupon offered on the bond was 7.75 per cent.

Last week, Brickwork Ratings had reaffirmed AA rating of the lender's tier II bonds worth Rs 1,000 crore. The outlook was also reaffirmed as stable.

The domestic rating agency had also assigned AA- rating to Bank of Maharashtra's Rs 1,000 crore of Basel III compliant additional tier I bonds with a stable outlook.

"The rating assignment/reaffirmation factors in the strong support from the government, over 10 per cent growth in business, and adequate capitalisation and resource profile as of September 30, 2020," the rating agency had said in a note on its website.

The government's shareholding in the bank stood at 93.3 per cent as of September 2020. Over the last few years, the bank has received a capital infusion of Rs 20,000 crore from the government.

The lender gets 60 per cent of its business from Maharashtra. The business size of Rs 2.62 trillion includes deposits of Rs 1.58 trillion, while advances crossed Rs 1 trillion as of September 30, 2020.