Bank of India is gearing up to launch Basel-III Tier-II bonds on September 13, with the goal of raising up to Rs 2,000 crore, according to insiders in the financial market. These bonds will have a maturity period of 10 years or 120 months. The bank intends to secure a minimum of Rs 1,000 crore, with the option to retain oversubscriptions up to Rs 1,000 crore, as outlined in the terms of the offering.
A reliable source close to the development revealed on September 12, “The bank is looking to raise up to Rs 2,000 crore through bond issuance on September 13. These bonds will also come with a call option after five years.”
Bidding for these bonds will be open between 10 AM and 12 PM on September 13 via the National Stock Exchange of India’s electronic bidding platform. Investors can anticipate the pay-in date and the allotment date to fall on September 15.
CRISIL Ratings has assigned an ‘AA+’ rating with a ‘Stable’ outlook to the bonds, while Acuite Ratings & Research has also rated them ‘AA+’ with a ‘Positive’ outlook.
The state-owned bank intends to utilize the funds raised from this issuance for its routine business operations, in accordance with the bank’s issuer manual, which states, “The funds being raised by the Bank through this Issue are not meant for financing any particular project.”
These bonds come with a call option after five years or on September 15, 2028, and on each anniversary date thereafter, subject to Tax Call/ Regulatory Call. Should the bank choose to exercise this call option, the bonds will be redeemed on that specified date. Furthermore, these bonds are scheduled to be listed on the wholesale debt segment of the National Stock Exchange of India Limited (NSE).
The issuer is required to submit an application to the NSE for listing the bonds and obtain listing permission within T+3 days from the close of the issuance (T day), according to the bank’s terms.
In the event of a delay in listing the debt securities beyond the stipulated period, the issuer has committed to pay a penal interest rate of at least 1 percent per annum over the coupon rate for the duration of the delay to the investors, starting from the deemed date of allotment until the securities are listed.
Additionally, in the case of any default, including payment delays on interest and/or principal redemption on the scheduled dates, the issuer will be liable to pay additional interest at a rate of 2 percent per annum over the coupon rate for the defaulting period.
To oversee the issuance, the state-owned bank has enlisted the services of IDBI Trusteeship Services Ltd as the debenture trustee and Bigshare Services as the registrar.
On September 13, Axis Finance successfully raised Rs 150 crore through bonds maturing on December 11, 2026, while LIC Housing Finance secured Rs 500 crore via bonds maturing on May 19, 2026, as reported by NSE-EBP data.
About Bank of India:
The Bank of India, a public sector bank based in the Bandra Kurla Complex of Mumbai, India, was established in 1906 and has remained under government ownership since its nationalization in 1969. BoI proudly holds the distinction of being one of the founding members of SWIFT, an organization that plays a pivotal role in enabling efficient and affordable financial processing and communication services.
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