Public sector Canara Bank plans to raise at least $300 million by issuing bonds to investors abroad as it seeks to shore up its liability franchise amid strong credit growth. The bank has hired Singapore’s DBS Bank, Japan’s Mitsubishi UFJ Financial Group and France’s BNP Paribas for the issue, likely opening later this month, three people familiar with the process said.
“The bank is among a pack of three or four from India which are actively looking to raise dollar funds. But the timing is still not decided because as we speak global markets are volatile post the hike by the Japanese central bank. There is still demand for Indian paper and if the conditions improve Canara could price this issue as early as the month end,” said one of the persons cited above.
This is the first bond issue by the bank in more than 5 years. In March 2019, the bank had sold a five-year bond raising $400 million via London branch.
“Whenever market conditions improve Canara will be among the first off the block. The bank will keep things in readiness and move whenever the market is good. The issue will consist of $300 million with a greenshoe option to absorb strong demand. This is a good way for the bank to diversify its funding base especially if it plans to build an overseas book,” said a second person aware of the transaction.
