Punjab National Bank raises Rs 1,859 crore in capital via AT-I bonds

Public sector lender Punjab National Bank has raised Rs 1,859 crore in capital through additional tier I bonds (AT-I bonds) to meet regulatory norms and support business growth. The coupon for the bonds was fixed at 8.47 per cent.

Bond market sources said the amount raised by the lender was lower than the indicative amount of Rs 2,000 crore. The base issue size was Rs 500 crore with a green issue option of Rs 1,500 crore. These bonds have a call option at the end of five years.

Rating agency ICRA has assigned an “AA+” rating to the AT1 bonds of PNB.

Its board has granted approval to raise up to Rs 7,000 crore through tier I bonds in the current financial year (FY24). It issued AT-I bonds for Rs 4,153 crore till December 2023, according to the bank’s presentation for Q3FY24.

Its capital adequacy ratio stood at 14.63 per cent with tier I of 11.73 per cent. The Common Equity Tier I (CET1) was 9.86 per cent and AT-I was 1.87 per cent at the end of December 2023.

According to the Prime database, banks have raised Rs 14,504 crore through AT-I bonds till the middle of March in the current financial year. Lenders had raised capital worth Rs 34,394 crore through AT-I bonds in FY23.