Canara Bank to raise Rs700cr via bond issue

Canara Bank to raise Rs700cr via bond issue

BS Reporter / Bangalore January 3, 2008

Bangalore-based Canara Bank, the third largest public sector bank, is planning to raise Rs 700 crore to augment its capital by issuing Tier-II bonds. According to a statement to BSE today, the bank's bond issue carries a coupon rate of 9% per annum and is rated AAA (stable) by CRISIL and LAAA by ICRA.

The bonds will be listed at NSE. The issue will open on January 7 and closes next day. The deemed date of allotment is January 9, 2008.

For the second quarter ended September 30, 2007, Canara Bank's capital to risk weighted assets ratio stood at 13.89% compared to 12.27% during the same period last year.

The bank aims to make a transition to the new capital adequacy framework under Basel-II norms from March 2008. "We have already commenced parallel run. In the medium term, we will maintain a 12% CRAR as per Basel-II norms,