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Wednesday, December 05, 2012 (18:36:44)
Tags : India Business News, Bonds, Union Bank

United Bank issues bonds to raise Rs 300 crore

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Kolkata, Dec 5: Public sector United Bank of India Wednesday said it has completed issuing perpetual bonds to raise Rs.300 crore to augment its core capital.

The Kolkata-headquartered bank, which had indicated its intention to mobilise resources after a board meeting last month, issued the bonds having face value of Rs.10 lakh each carrying a coupon of 9.27 percent.

The said the fund raised would result in augmentation of its Tier I capital.

The bonds issued were perpetual and "call option" might be exercised by the issuer at the end of tenth year with the approval of Reserve Bank of India (RBI), the bank said in a release here.

"These bonds shall be BASEL-II compliant and eligible to be a part of the Additional Tier-I Capital under the new BASEL-III norms. However, being BASEL-II compliant, the bonds shall be liable to progressive discount of 10 percent per year starting from January 2013 under BASEL-III," said Bhaskar Sen, chairman and managing director.(IANS)