Bank Of India Raises Rs 5,000 Crore Via Infra Bond At 7.41% Coupon
The issue, which had a base size of Rs 2,000 crore and a greenshoe option of Rs 3,000 crore, was fully subscribed.
Bank of India raised Rs 5,000 crore through the issue of 10-year infrastructure bond at a coupon of 7.41% on Wednesday, in line with market's expectations, three people told NDTV Profit.
Market participants had expected the bank's bond to be issued at around 7.40-7.45% rate. The issue, which had a base size of Rs 2,000 crore and a greenshoe option of Rs 3,000 crore, was fully subscribed.
This is the bank's second tranche of 10-year infrastructure bonds in the current financial year, which are rated AA+ by CARE Ratings.
In July, the bank had raised Rs 5,000 crore through 10-year infra bonds at a coupon of 7.54%, which was fully subscribed.
Bank of India has a loan pipeline of over Rs 70,000 crore. Of this, infrastructure pipeline is of nearly Rs 15,000 crore, Managing Director and Chief Executive Officer Rajneesh Karnatak had said in the second quarter earnings call.
The bank has infrastructure loan pipeline for roads and disbursals for roads, ports, solar power plants and wind energy are yet to take place. The bank has also sanctioned some data warehouse projects as well, Karnatak had said.
Banks and financial institutions raise funds through infrastructure bonds to finance their long-term infrastructure projects.
These bonds have a minimum maturity of seven years and are eligible for some regulatory exemptions, such as mandatory requirements of statutory liquidity ratio and cash reserve ratio. Affordable housing loans also qualify for lending against infrastructure bonds.
