CANBK

By Dharamraj Dhutia and Khushi Malhotra

MUMBAI, Nov 7 (Reuters) - Aggressive pricing on bonds issued by India's largest lender is spurring state-run peers to plan similar debt issuances worth around $1 billion in the coming weeks, four merchant bankers told Reuters on Friday.

Punjab National Bank PNBK.NS , Canara Bank CNBK.NS , Bank of India BOI.NS , Indian Bank INBA.NS , and Indian Overseas Bank IOBK.NS intend to collectively raise about 90 billion rupees ($1.01 billion) through Basel III-compliant Tier II bonds by the end of the year, according to the bankers, who spoke on condition of anonymity as they are not authorized to speak to the media.

None of the state-run lenders responded to Reuters' emails seeking comment.

Three weeks ago, State Bank of India SBI.NS raised 75 billion rupees through 10-year Tier II bonds at a coupon rate of 6.93%, only 30 basis points above the annualized 10-year government bond yield.

That issuance highlighted the potential for lenders to improve their regulatorily mandated capital adequacy ratios at a relatively low cost.

Investor demand for Tier II bonds from public sector banks is expected to remain robust because "in volatile equity markets, fixed income instruments like bonds become relatively more attractive," said Vineet Agrawal, co-founder of online trading platform Jiraaf.

"New issuances, when priced right before expected rate cuts, could lock in higher yields today, making these deals even more appealing," he added.

Some lenders may opt for issuances with a five-year call option to diversify the investor base and appeal to asset managers, bankers said.

"With the rate cut cycle nearing its end, investors are likely to favor spread assets and corporate bonds. Tier II bonds with a 5-year call option offer attractive yields and duration flexibility, making them well-positioned for strong subscription," said Abhishek Bisen, head of fixed income at Kotak Mahindra Mutual Fund.

Indian Bank and Indian Overseas Bank aim to raise 10 billion rupees each, while Bank of India plans to secure around 30 billion rupees. Punjab National Bank and Canara Bank are targeting 20 billion rupees apiece, they said.

Maturing Tier II bonds are also driving the issuances. Bank of India has bonds worth 30 billion rupees due in December, while Canara Bank faces maturities of 22.50 billion rupees and Indian Bank has a 10 billion rupee maturity scheduled for the same month.

($1 = 88.6950 Indian rupees)

(Reporting by Dharamraj Dhutia and Khushi Malhotra; Editing by Ronojoy Mazumdar)

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Updates stock price in paragraph 2, adds details throughout

By Vivek Kumar M

Oct 17 (Reuters) - India's Canara HSBC Life Insurance CANR.NS made a muted debut on the bourses on Friday, as unappealing pricing and a crowded IPO market clouded the insurer's prospects.

Its stock was trading at 108.9 rupees, as of 10:50 a.m. IST, up 2.7% from its issue and listing price of 106 rupees, yielding the insurer a valuation of 105.15 billion rupees ($1.20 billion).

Peers SBI Life Insurance SBIL.NS and HDFC Life Insurance HDFL.NS are valued around $21 billion and $18 billion, respectively.

Canara HSBC Life Insurance, which is a joint venture between Canara Bank and HSBC Insurance (Asia-Pacific) Holdings, struggled to garner bids from retail and non-institutional investors earlier this week.

Retail investors subscribed 42% of their quota, while high-net-worth individuals subscribed a third of their shares in the $283 million IPO.

Thanks to qualified institutional buyers, the issue was subscribed 2.29 times, which was still lower than most other IPOs that opened in the last couple of weeks.

For instance, another Canara Bank-promoted entity, Canara Robeco Asset Management CANE.NS, received bids worth nearly 10-fold and closed 13% higher in its debut on Thursday.

Choice Broking said the insurer's valuation appeared to be fully priced, with price-to-enterprise value multiple, a stock valuation metric, of 1.6x, while industry averaged 2.4x.

"High dependence on bancassurance (where banks sell insurance) and relatively lower VNB (value of new business) margins compared to peers is expected to keep valuation multiples at a discount to peers," ICICI Direct said.

The insurer got 87% of its new business premium in fiscal year 2024-25 through bancassurance, with Canara Bank contributing 70.6% of this.

The listing caps a busy week for the Indian IPO market, which saw five stock debuts, including a blockbuster listing from LG Electronics India LGEL.NS and a muted start from the country's largest IPO of the year, Tata Capital TATC.NS. ($1 = 87.8387 Indian rupees)

(Reporting by Vivek Kumar M; Editing by Sumana Nandy and Harikrishnan Nair)

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Oct 16 (Reuters) - Canara Robeco Asset Management Company Ltd CANE.NS:

• CANARA BANK - DIVESTED STAKE IN CANARA ROBECO ASSET MANAGEMENT THROUGH IPO FROM 51% TO 38%

Source text: ID:nBSE7Vld2d

Further company coverage: CANE.NS

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BENGALURU, Oct 14 (Reuters) - Canara HSBC Life Insurance Company's $283 million initial public offering (IPO) was fully subscribed on the third day of its bidding on Tuesday, driven by robust interest from institutional buyers.

A joint venture between India's Canara Bank CNBK.NS and HSBC Insurance (Asia-Pacific) Holdings, the insurer is targeting a market valuation of around $1.14  billion through the IPO.

(Reporting by Nishit Navin and Vivek Kumar M; Editing by Sumana Nandy and Sonia Cheema)

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Adds details and background from paragraph 2 onwards

Oct 6 (Reuters) - India's Canara Robeco Asset Management Company has set a price band of 253-266 rupees per share for its upcoming listing, aiming for a valuation of about 53.05 billion rupees ($597.9 million) at the upper end, as per Reuters calculations.

The asset manager's IPO comes at a busy time for India's primary market. The October-December quarter is expected to see $8 billion worth of fundraises, with several large-ticket issuances such as Tata Capital, LG Electronics India and WeWork India Management on the anvil.

Canara Robeco, a joint venture between Canara Bank CNBK.NS and ORIX Corporation Europe, a unit of Japan's ORIX Corporation 8591.T, will open its initial public offering to retail investors on October 9, with anchor investors invited to place their bids on October 8.

The three-day share sale will conclude on October 13, and Canara Robeco's stock is expected to list on or around October 16.

The firm, which manages more than 1 trillion rupees in assets, will not issue any fresh shares in the IPO, with the two existing shareholders offloading a combined 49.8 million shares.

Canara Bank will trim its stake by 13% in the asset manager, selling 25.92 million shares, while ORIX will divest 23.93 million shares.

Canara Robeco competes with major asset managers such as HDFC Asset Management Company HDFA.NS, Nippon Life India Asset Management NIPF.NS and UTI Asset Management Company UTIA.NS.

($1 = 88.7300 Indian rupees)

(Reporting by Yagnoseni Das in Bengaluru; Editing by Sumana Nandy and Sherry Jacob-Phillips)

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By Dharamraj Dhutia

MUMBAI, Oct 3 (Reuters) - At least four major state-owned Indian banks have increased their internal limits for investing in state bonds following discussions with the Reserve Bank of India last month, according to five treasury officials aware of the decisions.

Bank of Baroda BOB.NS, Punjab National Bank PNBK.NS, Canara Bank CNBK.NS and Union Bank of India UNBK.NS - among India's top five government-owned lenders by assets - have raised their investment caps by 5 to 20 percentage points, the sources said.

"Most of the top five-six banks barring one have raised the internal cap that they had set for taking exposure to state debt in treasury books after a round of consultations and meetings with the central bank," one of the officials said.

The sources requested anonymity as they are not authorised to speak to media. The banks did not respond to emailed queries.

Indian banks, including both private and public sector entities, are significant buyers of state-issued bonds, collectively holding nearly 36% of states' debt as of June, according to regulatory data.

BORROWING COST RELIEF

Indian states are projected to raise a record 12 trillion rupees ($135.2 billion) through bond issuances in the current financial year, with 7 trillion rupees expected between October and March.

Reduced buying by banks, insurers, and pension funds had driven yields on state bonds higher by 40 to 70 basis points during the three months ending September, with several auctions undersubscribed.

Market participants now anticipate improved bank participation at auctions, which could ease yields. Banks had also sought changes to the auction process to mitigate mark-to-market losses on their portfolios.

($1 = 88.7600 Indian rupees)

(Reporting by Dharamraj Dhutia; Editing by Mrigank Dhaniwala)

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** Indian PSU banks .NIFTYPSU rise 1.1%

** Rise led by State Bank of India SBI.NS, which is up 2%, after CLSA identifies it among its top picks in large-cap lending space

** CLSA says that SBI, India's largest lender by assets, could reach $100 billion market cap within a year

** Canara Bank CNBK.NS rises about 2% after unit Canara Robeco Asset Management files updated DRHP with SEBI for an initial public offering

** CNBK set to gain for third consecutive session

** YTD, the sub-index is up 14%, CNBK climbs about 21% while SBI rises 9.7%

(Reporting by Urvi Dugar)

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By Shubham Batra and Dharamraj Dhutia

MUMBAI, Aug 7 (Reuters) - India's Canara Robeco Asset Management Company CANE.NS sees value in two-year to seven-year government bonds and the liquid 10-year paper as levels are attractive, with a base case that the central bank's rate easing cycle is over, an official said on Thursday.

"The short-to-medium term on the government bond yield curve looks fine. So the two-year to seven-year and probably the 10-year as well, since it is the benchmark and most liquid," Avnish Jain, head of fixed income at the fund house, told Reuters' Trading India forum.

The fund house, which manages over 103 billion rupees ($1.17 billion) in debt assets, believes the 10-year benchmark bond yield IN063335G=CC, currently at 6.40%, could test 6.50% in the current financial year.

The Reserve Bank of India maintained status quo on rates on Wednesday, but kept its growth forecast unchanged, while assuming that inflation will rise above its 4% target later in the year.

This led to a large selloff in bonds, as many traders were positioned for a cut or at least dovish commentary, while several analysts changed their calls to the end of the rate-easing cycle.

The RBI is looking at one-year forward inflation, which pushed them to maintain the policy stance and keep interest rates unchanged, said Jain.

"The base case is that rate easing is done, and we would likely see a long pause. I think 5.50% looks like a terminal rate, with the possibility of (one more) 25-bp cut, if growth dips too much," he said.

"I think probably a growth shock would nudge the RBI to cut rates further."

He also finds two-year to four-year corporate bonds attractive, as the spread over government securities is decent, and they may provide better returns.

"I think in the short-to-medium-term perspective, short- to mid-duration (papers) should work better. Corporate bond heavy funds may give better risk-return reward, while government bonds may trade sideways."

($1 = 87.6840 Indian rupees)

(Reporting by Shubham Batra and Dharamraj Dhutia; Editing by Janane Venkatraman)

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** Shares of Canara Bank CNBK.NS rise 0.3% to 133.8 rupees, after jumping nearly 4% after results on Thursday

** Morgan Stanley maintains "underweight" rating; raises TP to 95 rupees from 90 rupees, implying ~16.3% downside from last close

** Says core operating profit was below expectations due to lower interest income and higher costs

** Investec Bank maintains "hold" rating; raises TP to 110 rupees from 105 rupees, implying ~3.1% downside

** Expects 10–11% loan growth over FY26–27e, RoA at 0.9%; raises FY26e EPS by 5% on stronger treasury gains and recoveries

** CNBK rated "buy" by 16 analysts on average; median target price is 115 rupees – data compiled by LSEG

** Stock up 13.7% YTD

(Reporting by Rudra Pratap Singh in Bengaluru)

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** India's Canara Bank CNBK.NS jumps ~4% to 112.24 rupees, on course for biggest daily pct rise in four months

** Stock rises after Q1 earnings announcement, was down 0.2% ahead of the news

** Lender posts higher profit and interest income compared to last year

** Asset quality improves; net non-performing assets down to 0.63% from 0.7% a quarter ago and 1.24% a year ago

** YTD, CNBK up 12.1%

(Reporting by Vivek Kumar M)

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June 12 (Reuters) - Canara Bank Ltd CNBK.NS:

• APPROVES CAPITAL RAISING PLAN UP TO 95 BILLION RUPEES

• TO RAISE 60 BILLION RUPEES VIA TIER II BONDS

• TO RAISE 35 BILLION RUPEES VIA ADDITIONAL TIER I BONDS

• TO RAISE CAPITAL THROUGH BASEL III COMPLIANT ADDITIONAL TIER I BONDS WORTH 35 BLN RUPEES

Source text: ID:nBSE6N7G6b

Further company coverage: CNBK.NS

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June 5 (Reuters) - Canara Bank Ltd CNBK.NS:

• CANARA BANK - TO CONSIDER AND APPROVE CAPITAL RAISING PLAN OF BANK FOR FY 2025-26

Source text: ID:nBSE4JTg7L

Further company coverage: CNBK.NS

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May 30 (Reuters) - Canara Bank Ltd CNBK.NS:

• CANARA BANK- TO CONSIDER AND APPROVE CAPITAL RAISING PLAN OF BANK FOR FY 2025-26

Source text: ID:nBSE26hM3M

Further company coverage: CNBK.NS

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** Shares of Canara Bank CNBK.NS rise 3.5% to 96.95 rupees

** Bank's Q4 profit rose 33.1% Y/Y to 50.03 bln rupees ($588.4 mln), beats analysts' estimates of 41.04 bln rupees

** Q4 gross NPA improves to 2.94% from 3.34% in Q3

** CNBK down ~3% YTD

($1 = 85.0290 Indian rupees)

(Reporting by Vijay Malkar)

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Updates with details throughout

April 25 (Reuters) - India's Canara Robeco Asset Management Company has filed for an initial public offering, draft papers showed on Friday, with its existing shareholders looking to sell stakes at a time when the IPO market is slowing.

Canara Robeco is a joint venture between India's state-owned Canara Bank CNBK.NS and Netherlands-headquartered ORIX Corporation Europe, which is a unit of Japan's ORIX Corporation 8591.T.

The firm, which manages more than 1 trillion rupees ($11.7 billion) in assets, will not issue fresh shares in the IPO, but the two owners will sell a combined 49.8 million shares.

Canara Bank will reduce its stake in the asset manager by 13% by selling 25.92 million shares via the listing. ORIX will sell 23.93 million shares.

The asset manager did not detail the size or timing of the IPO.

The listing is set to come at a time when rising global market volatility, driven by U.S. tariff flip-flops, is forcing companies to recalibrate IPO ambitions to avoid weak demand or failed listings.

India was the world's second-largest market by IPO proceeds in 2024 but listings are down close to 15% this year, data compiled by LSEG showed.

Canara Robeco competes with other major asset managers such as HDFC Asset Management Company HDFA.NS, Nippon Life India Asset Management NIPF.NS and UTI Asset Management Company UTIA.NS.

Its profit for the fiscal year ended March 2024 was 91% higher than a year ago, the draft prospectus showed, while revenue from operations was 55.4% higher.

In a country where physical assets still dominate financial savings, investments in mutual funds are on the rise, in tandem with greater financial awareness.

Mutual funds, as a portion of household financial savings, grew from 2% to around 7% between fiscal years 2021 and 2024, with investment value more than doubling to 2.4 trillion rupees, the prospectus showed, citing data from India's central bank and Crisil Intelligence.

($1 = 85.3680 Indian rupees)

(Reporting by Ananta Agarwal in Bengaluru; Editing by Mrigank Dhaniwala)

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April 11 (Reuters) - Canara Bank Ltd CNBK.NS:

• CANARA BANK LTD - AMIT MITTAL APPOINTED AS GROUP CHIEF FINANCIAL OFFICER

Source text: ID:nBSE5S2Js6

Further company coverage: CNBK.NS

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March 18 (Reuters) - Canara Bank Ltd CNBK.NS:

• CANARA BANK - 532483 - ISSUE OF TIER II BONDS

• CANARA BANK- RAISED 40 BILLION RUPEES VIA TIER II BONDS

Source text: ID:nBSEKyK9r

Further company coverage: CNBK.NS

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MUMBAI, March 17 (Reuters) - India's Canara Bank CNBK.NS has accepted bids worth 40 billion rupees ($460.8 million) for Basel III compliant Tier II bonds maturing in 10 years, three bankers said on Monday.

It will pay an annual coupon of 7.46%, and had invited bids from bankers and investors earlier in the day, they said.

The company did not immediately reply to a Reuters email seeking comment.

Here is the list of deals reported so far on March 17:

*Size includes base plus greenshoe for some issues

($1 = 86.8000 Indian rupees)

(Reporting by Dharamraj Dhutia; Editing by Varun H K
Editing by)

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MUMBAI, March 12 (Reuters) - India's Canara Bank CNBK.NS plans to raise 40 billion rupees ($458 million), including a greenshoe option of 30 billion rupees, through sale of Basel III compliant tier II bonds maturing in 10 years, three merchant bankers said on Wednesday.

The state-run lender has invited coupon and commitment bids from bankers and investors on Monday, they said.

The bonds have a call option at the end of five years.

The lender did not immediately reply to a Reuters email seeking comment.

Here is the list of deals reported so far on March 12

*Size includes base plus greenshoe for some issues

($1 = 87.2430 Indian rupees)

(Reporting by Dharamraj Dhutia; Editing by Mrigank Dhaniwala; Editing by Mrigank Dhaniwala)

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Feb 11 (Reuters) - Canara Bank Ltd CNBK.NS:

• ONE YEAR MCLR REMAINS UNCHANGED AT 9.10%

Source text: ID:nBSE6zQfk

Further company coverage: CNBK.NS

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Jan 27 (Reuters) - Canara Bank Ltd CNBK.NS:

• CANARA BANK Q3 NET PROFIT 41.01 BILLION RUPEES

• CANARA BANK Q3 GROSS NPA 3.34%

• CANARA BANK Q3 INTEREST EARNED 303.12 BILLION RUPEES

• CANARA BANK Q3 PROVISIONS AND CONTINGENCIES 23.98 BILLION RUPEES

• CANARA BANK Q3 PROVISIONS FOR NPA 19.82 BILLION RUPEES

Source text: [ID:]

Further company coverage: CNBK.NS

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Dec 10 (Reuters) - Canara Bank Ltd CNBK.NS:

• ONE YEAR MCLR REVISED TO 9.10% EFFECTIVE DEC 12

Source text: [ID:]

Further company coverage: CNBK.NS

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Dec 5 (Reuters) - Canara Bank Ltd CNBK.NS:

• RBI ACCORDED APPROVAL FOR DIVESTING STAKE IN CANARA ROBECO ASSET MANAGEMENT

• RBI ACCORDED APPROVAL FOR DIVESTING STAKE IN CANARA HSBC LIFE INSURANCE

• DIVESTING STAKE IN CANARA ROBECO AMC, CANARA HSBC LIFE INSURANCE VIA IPO

• RBI APPROVAL TO DIVEST 13% STAKE OF CO IN CANARA ROBECO ASSET MANAGEMENT

• RBI SAYS BANK SHOULD ADHERE TO OCTOBER 31, 2029 TIMELINE FOR BRINGING STAKE UP TO 30%

• RBI APPROVAL TO DIVEST 14.5% STAKE OF CO IN CANARA HSBC LIFE INSURANCE

• POST RBI APPROVAL, CO WILL INITIATE PROCESS OF IPO

Source text: ID:nNSE1DqBVY

Further company coverage: CNBK.NS

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Moves position of 'to India' in paragraph 7, no other changes

By Rishika Sadam and Siddhi Nayak

Nov 28 (Reuters) - Indian banks are reviewing their Adani exposure and whether they need to tighten due diligence, eight bankers said on Thursday, after the group's billionaire founder Gautam Adani was indicted by U.S. authorities over an alleged $265 million bribery scheme.

Adani Group's listed stocks, which at one point saw as much as $34 billion wiped off their market value, meanwhile recovered ground as some partners and investors rallied behind it.

State Bank of India SBI.NS will not stop lending to ongoing Adani projects that are nearing completion, two sources told Reuters, but will exercise caution when disbursing loans to ensure all terms and conditions are being met.

Bank of India BOI.NS, Union Bank UNBK.NS, ICICI Bank ICBK.NS, Canara Bank CNBK.NS, IDBI Bank IDBI.NS and RBL Bank RATB.NS, which have relatively smaller exposures to the Adani Group, are undertaking similar exercises, sources said.

A regulatory source aware of the development said from a banking system perspective that no entity was over-exposed to the Adani group and there was no cause for concern.

Earlier on Thursday, Israel said it wants Adani Group to continue to invest there, adding that the U.S. allegations were not "problematic" from its perspective.

"We wish Adani and all Indian companies continue to invest in Israel," Israel's Ambassador to India Reuven Azar told Reuters in an interview.

The Adani Group holds a 70% stake in Haifa port in northern Israel and is involved in projects with Israeli firms, including manufacturing military drones and commercial semiconductors.

Adani and seven others are accused by U.S. authorities of being part of a scheme to pay bribes to secure Indian power supply contracts. The Adani Group has denied the allegations.

The Indian ports-to-power conglomerate has also received public backing from Abu Dhabi's International Holding IHC.AD, which maintained its outlook on investments in the group.

"Our partnership with the Adani Group reflects our confidence in their contributions to the green energy and sustainability sectors," IHC said on Wednesday, adding that it "continues to evaluate relevant information and developments".

IHC, which is one of Adani's key foreign investors, boosted its stake in the group's Adani Enterprises ADEL.NS flagship to more than 5% last year after selling down investments in Adani Green Energy ADNA.NS and Adani Energy Solutions ADAI.NS.

Shares in Adani Green, the company at the centre of the bribery allegations, rose by 10% on Thursday, hitting the cap on gains in a single session for a second consecutive day, with Adani Energy also up the maximum 10%.

The total losses in the value of Adani Group's 10 listed companies have narrowed to $14.5 billion from about $34 billion, the low reached on Tuesday after the U.S. indictments.

FALLOUT

Global investors say worries of a wider spillover from the Adani allegations will hurt sentiment in India, but not the long-term outlook, as they wager one of the world's best-performing markets will get back on track next year.

Investors expect a stronger spotlight on governance and disclosure, and perhaps some volatility, but say the affair has not challenged the reasons they are in India in the first place - for exposure to a growing economy and a huge consumer market.

Indian Prime Minister Narendra Modi's government has not commented on the allegations against the Adani Group and has blocked opposition party demands for a debate on them.

Both houses of India's parliament were suspended temporarily within minutes of opening on Thursday as opposition lawmakers disrupted proceedings for the third day over the issue.

Many opposition parties accuse Modi and his Bharatiya Janata Party (BJP) of favouring Gautam Adani and blocking investigations against him, charges which both have denied.

The Adani Group, which is among India's biggest business empires, has been under scrutiny since January 2023 short seller Hindenburg Research accused it of stock manipulation, which the group has denied, and questioned its high debt levels.

Adani Green said on Wednesday that Adani had been charged by U.S. Securities and Exchange Commission (SEC) for alleged violations of securities law and faced potential fines but had not been charged under the U.S. Foreign Corrupt Practices Act.

The civil action launched by the SEC runs in parallel to U.S. federal prosecutors' indictment against Adani and others.

Repercussions from the indictment have mounted for the Adani Group over the past week, with credit ratings agencies cutting the outlook for some of the listed companies' bonds.

French oil major TotalEnergies TTEF.PA, said on Monday it would not make any more investments in the Adani Group until there was clarity over the allegations and consequences. Total has a 20% stake in Adani Green.

Kenya has scrapped a $2 billion procurement project that was to give Adani control of the country's main airport and it shelved a 30-year, $736-million public-private partnership, signed by Adani Energy with its energy ministry in October.

Closer to home, Sri Lanka said it would investigate all Adani-related projects in the island nation, while Bangladesh is investigating power generation contracts signed under the previous prime minister, one of which was with Adani Power.

(Reporting by Hadeel Al Sayegh in Dubai, Shilpa Jamkhandikar in Mumbai and Nigam Prusty in New Delhi; Writing by Scott Murdoch, Chris Thomas; Editing by Alexander Smith)

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Oct 29 (Reuters) - Canara Bank Ltd CNBK.NS:

• CANARA BANK Q2 NET PROFIT 40.15 BILLION RUPEES; IBES EST. 37.58 BILLION RUPEES

• CANARA BANK Q2 GROSS NPA 3.73%

• CANARA BANK Q2 INTEREST EARNED 297.40 BILLION RUPEES

• CANARA BANK Q2 NET NPA 0.99%

• CANARA BANK Q2 PROVISIONS AND CONTINGENCIES 22.51 BILLION RUPEES

• CANARA BANK Q2 PROVISIONS FOR NPA 25.87 BILLION RUPEES

Further company coverage: CNBK.NS

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Oct 18 (Reuters) - Canara Bank Ltd CNBK.NS:

• APPROVED SALE OF ASSETS AND LIABILITIES OF CANARA BANK TANZANIA TO EXIM BANK TANZANIA

Source text for Eikon: ID:nNSEbr3YbH

Further company coverage: CNBK.NS

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Oct 10 (Reuters) - Canara Bank Ltd CNBK.NS:

• CANARA BANK - ONE YEAR MCLR RAISED TO 9.05% FROM 9%

Source text for Eikon: [ID:]

Further company coverage: CNBK.NS

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Sept 4 (Reuters) - Canara Bank Ltd CNBK.NS:

• ISSUANCE OF US $ 300 MILLION UNSECURED NOTES OF MTN BONDS

• COUPON RATE OF MTN BONDS AT 4.896% TO BE PAID SEMI ANNUALLY

Source text for Eikon: ID:nNSE9ljltF

Further company coverage: CNBK.NS

(Reporting by VijayDattaram Malkar)

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Aug 29 (Reuters) - Canara Bank Ltd CNBK.NS:

• ISSUE OF AT1 BONDS

• RAISED 30 BILLION RUPEES BASEL III COMPLIANT ADDITIONAL TIER 1 BONDS

Source text for Eikon: ID:nBSE7FmHZf

Further company coverage: CNBK.NS

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By Dharamraj Dhutia

MUMBAI, Aug 27 (Reuters) - India's first additional Tier I perpetual bond issuance after recent rule changes to make them more appealing was sold at a lower-than-expected coupon, indicating a revival in demand for such papers, four merchant bankers said on Tuesday.

Canara Bank CNBK.NS sold perpetual bonds with a call option at the end of 10 years at a coupon of 8.27% compared to expectations of 8.30%-8.34%.

KEY CONTEXT

Additional Tier I perpetual bonds have no pre-defined maturity date and mature when an issuing bank exercises the call option.

Funding through such paper had dropped to 175 billion rupees in fiscal 2024 from 344 billion rupees the previous year.

To drum up interest, the Securities and Exchange Board of India (SEBI) recently allowed mutual funds to value these papers as per call option, instead of 100-year papers.

WHY IT'S IMPORTANT

Funding via this route opens up another option for banks to raise capital, especially as they struggle to raise deposits.

This was the first such debt issue from any lender this financial year and paves the way for others, with State Bank of India SBI.NS among at least three set to sell such debt soon.

BY THE NUMBERS

Canara Bank's perpetual bond issue received bids worth 46.58 billion rupees ($555.24 million), which is over 4.5 times its base size of 10 billion rupees.

KEY QUOTES

"There was a good response from investors in Canara Bank issue, as the full amount was raised and at a reasonably tight rate of 8.27%. This indicates that there is decent investor demand for mid-sized issues of AA+ rated perpetual bonds from AAA-rated issuers," said Shameek Ray, head of debt capital markets at ICICI Securities Primary Dealership.

"There was participation from some mutual funds along with insurers, and Canara Bank also had the early mover advantage which worked in its favour," a senior merchant banker said requesting anonymity as he is not authorised to speak to media.

($1 = 83.8920 Indian rupees)

(Reporting by Dharamraj Dhutia; additional reporting by Bhakti Tambe; Editing by Savio D'Souza)

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