Union Bank raises Rs 500 cr to boost core capital

Public lender Union Bank has raised Rs 500 crore by issuing Basel III compliant bonds, a step that will add to its core tier-I capital.
Union Bank said it has issued 5,000 non-convertible, unsecured subordinated Basel III compliant perpetual bonds today to be included as additional tier-1 capital.
"The bond is issued for face value of Rs 10 lakh each at par aggregating Rs 500 crore on private placement basis," it said in a regulatory filing.
Perpetual bonds are treated as equity than debt and so, they do not carry any maturity date.
The bonds will carry a coupon rate of 9.08 per cent payable annually.

The Mumbai-headquartered Union Bank's board of directors had approved the capital plan for 2017-18 on April 28.

It had announced raising up to Rs 6,350 crore this fiscal in the form of core equity capital and/or additional tier I or tier II bonds for the current fiscal.
Besides, the lender has planned to raise up to Rs 4,950 crore through follow-on public offer, rights and private issue, including qualified institutional placement or preferential allotment to the government.
The stock closed 4.75 per cent up at Rs 178.60 on the BSE.