Syndicate Bank to raise up to $1 billion via MTN

The Manipal-based public sector Syndicate Bank plans to raise up to $1 billion through Medium Term Notes (MTN) to strengthen capital base and lending. Global rating agency Standard and Poor’s granted a BBB- rating to its multi-currency MTN programme.

Besides unsecured instruments (notes), the public sector lender would also float lower Tier-II subordinated bonds and hybrid Tier-I capital under the MTN programme.

Senior bank official said the road shows, for proposed offering under MTN, will be conducted at international financial centres like London and Singapore.

The size of issue, pricing and timing would be decided based on the market conditions, he added.

The senior notes will constitute direct, unconditional, unsecured and unsubordinated obligations of the bank, and will rank pari passu among themselves and equally with all other unsecured obligations.

Syndicate Bank’s payment obligation towards the hybrid Tier-I securities would be junior to the claims of senior and subordinated debt holders, excluding share holders (preference and equity).

The bank’s capital adequacy ratio was 11.74 per cent, much more than the minimum requirement of 9 per cent.

Tier-I capital ratio was 7.84 per cent and Tier-II was 3.90 per cent. Its risks weighted assets of Rs 76,273 crore at the end of December 2010.