CanBank to raise Tier-II capital

The Bangalore-based public sector Canara Bank intends to raise an aggregate Rs 300 crore with an option to retain over-subscription for Rs 125 crore as tier II capital through the issue of 'unsecured redeemable non-convertible subordinated bonds of face value of a Rs 10 lakh each for cash at par by way of private placement.

According to a press release, the bonds will constitute direct, unsecured and subordinated obligations of the bank, subordinate to the claims of all other creditors and depositors of the Bank as regards to repayment of principal and interest by the Bank out of its own funds.

The tenure of the bonds is 110 months and carries an interest of 8.15 per cent. The interest is calculated annually. The minimum application is 10 bonds. The bonds open for subscription on February 24 and closes on February 28. The bonds have been rated "LAAA" by ICRA and "AAA/Stable" by CRISIL. The deemed date of allotment is March 1, 2006.

The bonds will constitute direct, unsecured and subordinated obligations of the bank, subordinate to the claims of all other creditors and depositors of the bank as regards to repayment of principal and interest by the bank out of its own funds.

The bonds will be negotiated instruments in the nature of promissory notes, transferable by endorsement and delivery, the release added.