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BoB to raise Rs 1,650 cr from bonds

Press Trust of India  |  New Delhi 

State-owned lender of Baroda (BoB) today said it proposes to raise up to Rs 1,650 crore from Additional Tier-I (AT-1) bonds to fund business expansion.

committee of the today approved issuance of AT-1 capital bonds compliant with Basel III capital norms of Reserve of for minimum amount of Rs 500 crore with green shoe option, total issuance not to exceed Rs 1,650 crore in one or multiple issuance, BoB said.

This is within overall board approved limit of Rs 3,000 crore for AT-1 bonds, it said in a filing on stock exchanges.

These are perpetual debt instruments which neither carry maturity date nor are they redeemable, which means these bonds are eligible to be treated as equity than debt.

Under the Basel-III norms, AT-1 bonds come with loss absorbency features, meaning that in case of stress, banks can write off such or convert them into common equity if approved by the RBI.

AT-1 bonds, which qualify as core or equity capital, are one of the means of raising capital by public sector banks to meet global norms on capital adequacy (Basel III).

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Tue, October 10 2017. 15:07 IST