Corporation Bank to raise Rs 500 cr through Tier-I Basel-III bonds

Each bond is priced at Rs 10 lakh and minimum application size is fixed at 10 bonds

Mangaluru-based public sector lender Corporation Bank plans to raise Rs 500 crore through issue of unsecured, subordinated, perpetual additional Tier-I Basel-III compliant non-convertible taxable bonds on private placement basis.

The bonds are in the nature of debentures. The issue, which opened today, will close on February 2.

The Bank has secured AA-/Stable rating from CRISIL and IND AA-/Stable rating from India Ratings and Research Pvt Ltd.

Each bond is priced at Rs 10 lakh and the minimum application size is fixed at 10 bonds and in multiples of one bond thereafter.

The coupon rate is fixed at 9.51% per annum. The call option is discretionary and can be exercised only after the bonds have run for at least five years from the deemed date of allotment subject to RBI approval, the Bank said in a filing to BSE.

The bonds are listed on National Stock Exchange of India Limited. The bank’s overall Capital Adequacy Ratio was 11.7% with tier-I at 8.2% in March 2014.