Union Bank plans to raise Rs 2,000 crore by issuing Tier-II bonds

Public sector lender Union Financial institution of India plans to lift as much as Rs 2,000 crore by issuing Tier-II bonds. This can enhance the financial institution’s capital adequacy which can assist develop enterprise and meet regulatory norms.

The board has authorised the enabling decision to lift the capital by issuing Basel III-compliant bonds.

The financial institution additionally has flexibility to lift further fairness from the market, with authorities stake at 89.1 per cent as of June 30. Over the previous three monetary years, the federal government has infused round Rs 41,397 crore into the mixed entity — two public sector lenders Andhra Financial institution and Company Financial institution merged into Union Financial institution on April 1.

The financial institution’s widespread fairness Tier-1 ratio, Tier-I CAR and total CAR stood at eight.four per cent, 9.5 per cent and 11.6 per cent, respectively, as of June 30.

CRISIL has assigned a score of ‘AA+/Destructive’ to the financial institution’s Rs 2,000 crore of Tier-II bonds (underneath Basel III). It additionally reaffirmed its ‘CRISIL AA+/Destructive’ score on different long-term debt devices.

In the meantime, Canara Financial institution mentioned it has raised Rs 1,012 crore by issuing Basel III-compliant bonds. The financial institution mentioned it issued 10,120 non-convertible, perpetual, taxable, subordinated, absolutely paid up, unsecured bonds with coupon of eight.30 per cent.

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