Union Bank of India, which recently concluded road shows for its medium-term notes (MTN) programme, is likely to wait till the spreads come within an “acceptable range”.
The other issue which may delay its fund-raising plans is that the bank will enter a silent period in a week’s time as it is scheduled to announce its fourth quarter earnings by the end of April. “The market is currently very volatile and we are closely watching it. Whenever spreads come to an acceptable level, we will immediately do the deal. However, if we cannot do it in a week, we will have to wait till our quarterly results are out,” said a senior bank official. The official added the bank would raise anywhere between $300 million (Rs 1,332 crore) and $700 million (Rs 3,108 crore) through the MTN route but had not decided the final amount.
Among state-owned banks, Bank of Baroda recently completed its MTN programme by raising $350 million (Rs 1,554). It offered 230 basis points over US treasury rates. Export-Import Bank of India raised $200 million through a similar route on Wednesday. The issue was priced 179 basis points over the US LIBOR, which is the interbank cost of borrowing funds in US dollars.
