Indian Overseas Hits Mart With Rs 150 Crore Bond

Two public sector banks -- Bank of India (BoI) and Indian Overseas Bank (IOB) -- are set to raise Rs 310 crore from the market through tier-II issues.

IOB hit the market today with a Rs 150 crore issue while BoI plans to launch its Rs 160 crore of issue within next couple of days.

The IOB issue has a tenure of 67 months and has been rated 'AA' by Credit Rating and Information Services of India Ltd (Crisil). The paper carries an annually payable coupon of 9.40 per cent. ICICI Securities and Finance and A K Capital are the lead arrangers of the issue.

 

The details of the BoI issue could not be obtained, but investment banking sources said the bank is planning to manage the issue on its own. The issue has been rated 'AA+' by Crisil.

Meanwhile, UTI Bank has mopped up Rs 112 crore through its tier-II issue on December 10. The issue has a 66-month tenure and an annualised coupon of 9.80 per cent. The core size of the issue was Rs 100 crore, but the bank received oversubscription in excess to that.

Bond dealers said the issues of both IOB and BoI will also get a good response on the back of good liquidity in the system. Investment bankers expect that, in both cases, the majority of subscription will be from other banks as well.