Canara Bank raises $500 mn under its MTN programme

Asian markets subscribed to about 65% of bonds

Bangalore-based public sector lender Canara Bank has raised $500 million (around Rs 3,050 crore) through the issue of senior unsecured bonds under its Medium Term Note (MTN) programme. The issue opened and closed on October 10.

Asian markets subscribed to about 65% of the bonds, while the European investors subscribed to the balance amount, a senior official of the Bank said.

The money will come into the Bank’s account on October 18, 2013, he said.

The bonds will be listed on Singapore Stock Exchange. The bonds carry a coupon rate of 5.25% with a maturity period of five years. Bofa Merrill Lynch, Citi, JP Morgan, HSBC, Barclays, BNP Paribas and Credit Agricole were the joint lead managers for the issue.

The Bank, which launched its $2 billion MTN programme in 2007, has till now raised $1.1 billion. It raised $250 million in 2007, $350 million in 2011 and $500 million on October 10, 2013.

The Bank intends to use the proceeds of the MTN programme to fund its business expansion programme in its overseas branches. The Canara Bank has two branches in London, one each in Bahrain, Hong Kong and Shanghai. As of end of June quarter, the Bank's overseas business amounts to Rs 35,000 crore.