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Thursday, April 25, 2013

Union Bank of India to use $350 million bond proceeds for lending at international branches

State-run lender Union Bank of India  said it will be deploying the USD 350 million it raised through a bond sale for lending at its international branches.

The bank also clarified that it had not fallen short of achieving its target as erroneously reported earlier, saying the issue got oversubscribed by 4.3 times.

UBI carried out the bond sale through its Hong Kong branch and will be deploying the money for its ongoing lending activities at its international branches, the bank said.

"We are pleased to receive good response from investors, on what has been our fourth international bond transaction," its chairman and managing director D Sarkar said.

Strong perception of the bank allowed it to price the new 5.5-year bond at levels inside its existing secondary yield curve, Sarkar said.

The bank priced the issue at 3.625 per cent, it said in a statement.

As per the public sector bank, out of the USD 2 billion medium-term-note programme, the bank had raised over USD 1.2 billion with this issue.

"The success of the transaction is evidenced by the final spread achieved, which was 0.04 per cent tighter than the fair value price for a new 5.5-year issuance based on the secondary levels of the previous issue," said a senior banker of StanChart India.

Source: Economictimes


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