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Informist, Monday, Sept. 7, 2026

 

--Source: Canara Bank to likely issue INR 45 bln of perpetual AT-1 bonds Sept 

--Source: Expect coupon on Canara Bank perpetual AT-1 bonds to be 7.85% 

--Source: Canara Bank perpetual AT-1 bonds to have call option after 5 years 

 

By Nandini Sinha

 

MUMBAI – State-owned Canara Bank is likely to issue perpetual additional tier-I bonds in September to raise around INR 45 billion, a source in the bank told Informist. The coupon will be fixed at the time of bidding, and the lender expects around 7.85%, the source said.
 

"We hope to raise 4,500 crore (INR 45 billion) through these bonds. We are trying to come up with the issuance this month," the source said. The issue would have a call option exercisable after five years, the source said.

 

A perpetual bond is a debt instrument that has no maturity date. The issuer pays out interest on the bond value at a fixed rate, and the bonds are non-redeemable.  

 

In June, Canara Bank's board approved raising INR 45 billion through Basel III-compliant additional tier-I bonds and INR 40 billion through Basel III-compliant tier-II bonds in 2026-27 (Apr-Mar). For FY26, the board had approved raising INR 95 billion — INR 35 billion through additional tier-I bonds and INR 60 billion through tier-II bonds. 

 

In July, State Bank of India had raised INR 46.91 billion through perpetual bonds at a coupon of 7.75%. Among private players, Cholamandalam Investment and Finance Co. raised INR 20 billion in August through perpetual bonds at a fixed coupon of 9.87%. 

 

For the June quarter, Canara Bank reported a net profit of INR 48.56 billion on a total income of INR 396.84 billion. Monday, the bank's shares ended at INR 124 on the National Stock Exchange, down 1.2% from the previous close.  End 

 

Edited by Saji George Titus

 

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