Perpetual Bonds

Canara Bank sold perpetual bonds with a call option at the end of 10 years at a coupon of 8.27 per cent compared to expectations of 8.30 per cent-8.34 per cent

The note, which doesn't have a maturity date, is being arranged by Axis Bank Ltd. and carries a coupon of 9.50 per cent, according to people familiar with matter

Questions around the viability and pricing of perpetual bonds resurfaced after similar securities were written off as part of the rescue of Credit Suisse in March

India's Bank of Baroda plans to raise at least 5 billion rupees ($62.52 million) through sale of Basel III compliant additional Tier I perpetual bonds, say three merchant bankers

The recent semi-public exchanges between Sebi and DFS raise several questions about the legislative function of regulators that need careful consideration

Here's a selection of Business Standard opinion pieces for the day

AT1 bonds may lose sheen but Sebi takes the right call

Easing of valuation rule for perpetual bonds by Sebi will provide a breather to the mutual fund industry

Capital market regulator Sebi has eased valuation rule pertaining to perpetual bonds

Implementation of 100-year valuation norm pushed to April 2023

Here is look at outstanding AT1 bonds of select banks and amount for call option in due in FY22

Yields of perpetual bonds issued by State Bank of India and Bank of Baroda, for instance, have gone up by as much as 80-90 basis points (bps), and top recommendation lists of most managers

Sebi is not wrong in expressing a desire to draw an empirical bright line for an outer limit, in order to be able to compute yields, and thereby value the bonds

Here's a selection of Business Standard opinion pieces for the day

Sebi's new rules around mutual fund (MF) investments in these bonds have kicked up a storm

A sudden change in the metrics will be disruptive

Revised norms to treat all perpetual bonds as 100-year tenor to be withdrawn

Market participants say ask yields for other large-sized banks' AT-1 bonds have hardened further

Overall, more than Rs 8,000 crore of investments are exposed to YES Bank's AT-1 bonds

State Bank of India's bonds see 130 basis points jump in yields since Friday