PNB plans to raise up to Rs 2,000 cr through additional AT1 bonds

Public sector lender (PNB) plans to raise up to Rs 2,000 crore via additional tier I (AT 1) bonds on Tuesday. This is likely to be followed by State Bank of India’s AT 1 bonds worth Rs 4,000 crore next week.

Bond dealers said the base size of the offering is for Rs 500 crore with a green shoe option of Rs 1,500 crore. There is increasing interest in the instruments of public sector as the bad loan situation has become better, recoveries have improved and prospects of further stress look less.

Last week, Canara Bank raised Rs 1,500 crore via AT I bonds. The bank received a total bid amount of Rs 4,699 crore. Of this, issuance of Rs 1,500 crore was accepted at a coupon rate of 8.05 per cent.

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