Canara Bank to raise $200 m via bonds

Canara Bank is all set to raise $200 million through the issue of upper tier-II foreign currency bonds. The issue will enable the bank to maintain its capital adequacy ratio (CAR) above 12 per cent. The bank's CAR is now at 12.27 per cent.

A spokesperson for Canara Bank said the bonds issue will also aid it in meeting the Basel-II norms, which mandate that the CAR should be above 9 per cent. Canara Bank will also use a part of the proceeds for its overseas expansion programme.

This is the first such instrument that Canara Bank is going in for under its recently established $1 billion Medium Term Note Programme. According to officials at Canara Bank, the bank has the option to raise this quantum over a period of 10 years.

The bank announced that it expected ratings Baa2BB- from Moody's/Fitch and has mandated ABN Amro, Citigroup, HSBC and UBS as joint book runners for its inaugural issue.

Roadshows will take place in Hong Kong on November 13, in Singapore on November 14 and in London on November 15. The launch and pricing will decided at a later stage, subject to market conditions, the spokesperson added.