Union Bank of India on Friday said it is planning to raise up to Rs 1,500 crore by issuing Basel-III compliant perpetual debt instruments. The lender will issue bonds of face value of Rs 10,00,000 each.
In a regulatory filing, the state-run bank said it “is issuing Basel III compliant perpetual debt instruments in the nature of debentures eligible for inclusion in additional tier I capital of Rs 500 crore with green shoe option up to Rs 1,000 crore (maximum of Rs 1,500 crore) on private placement basis.”
Perpetual bonds carry no maturity date and hence may be treated as equity, not as debt.
The coupon on the bonds is fixed at 8.73 per cent per annum.
The bonds are rated IND AA/ Stable by India Rating & Research and BWR AA/Negative by Brickwork Rating India.
The call option was at the discretions of the issuer with prior approval of RBI subject to conditions mentioned in term sheet on fifth anniversary from the deemed date of allotment or any allotment anniversary date thereafter.