Canara Bank mops up Rs 3,000 crore in additional Tier-I bonds at 8.27%

Canara Bank managed to secure funding at a lower-than-expected 8.27 per cent -- a positive indicator for other lenders preparing to tap the AT-1 market in the near term

State-owned Canara Bank on Tuesday raised Rs 3,000 crore through the issuance of additional tier-1 (AT-1) bonds at an 8.27 per cent coupon rate, people familiar with the transaction revealed. The coupon rate came in slightly below market expectations, signalling favourable conditions for other banks considering similar issuances.

This marks the first AT-1 bond issuance by a major bank in 2024-25, as well as the first issuance of its kind since the markets regulator, Securities and Exchange Board of India (Sebi), allowed mutual funds to value these papers as per “yield to call (YTC)”, instead as 100-year