Business Standard

Punjab National Bank to raise $1.5 bn through bonds in one or two tranches

Indian state-run lender Punjab National Bank said on Wednesday it would raise up to 120 billion rupees ($1.46 billion) in one or two tranches, through the issue of bonds

PNB, Punjab national bank

Reuters BENGALURU

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BENGALURU (Reuters) - Indian state-run lender Punjab National Bank said on Wednesday it would raise up to 120 billion rupees ($1.46 billion) in one or two tranches, through the issue of bonds.
The lender said it would raise up to 70 billion rupees from the issue of Additional Tier 1 (AT1) bonds and the remaining 50 billion rupees from Tier II bonds.
AT1 bonds act as shock absorbers if a bank's capital levels fall below a certain threshold and can be converted into equity or written off.
On March 24, Punjab National Bank raised 9.74 billion rupees ($118.3 million) at 8.75%, 35 basis points higher than its previous bond sale in December.
It did not raise the full amount it could have, of up to 20 billion rupees.
While Indian banks do not have large dependence on AT-1 bonds, state-owned banks have a higher reliance on these securities, analysts said after Credit Suisse wrote down these bonds as part of its merger with UBS.
This, analysts said, could impact the pricing of these securities marginally in the Indian market.
($1 = 82.2800 Indian rupees)
 
(Reporting by Nandan Mandayam in Bengaluru; Editing by Nivedita Bhattacharjee)

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

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First Published: Mar 29 2023 | 10:54 PM IST

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