Union Bank of India raises Rs 750 cr via bonds

Public sector lender Union Bank of India has raised Rs 750 crore by issuing Basel III compliant bonds.
The bank has issued 7,500 non-convertible, unsecured subordinated Basel III compliant perpetual debt instruments for inclusion in additional tier-I capital, it said in a regulatory filing.
The bond is issued for face value of Rs 10 lakh each at par aggregating to Rs 750 crore on private placement basis, it added.
Perpetual bonds carry no maturity period and can be treated as equity not as debt.
The bonds, issued on a private placement basis, bears interest rate of 9.10 per cent per annum payable annually.

They are rated BWR AA+/Stable by Brickwork Rating and IND AA by India Ratings.

Banks have to strengthen capital base, as per Basel-III Capital Regulations, so as to mitigate concerns emanating from potential stresses on asset quality and consequential impact on performance and profitability of banks.
Indian banks are implementing these globally accepted standards in phases since April 1, 2013. They are expected to fully implement these norms by March 2019.
Union Bank of India share closed 0.67 per cent down at Rs 155 on BSE.