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Country’s third largest private sector lender, Axis Bank raised Rs. 5,705 crore by issuing long term infrastructure bonds for a 10-year period.
The senior unsecured redeemable non-convertible debenture issue was priced at 8.85% p.a. (fixed coupon) payable annually maturing on December 05, 2024. The NCD’s are rated AAA by CRISIL & ICRA. The NCDs shall be allotted to eligible investors on December 05, 2014, Axis Bank said in a statement.
It’s the highest amount a bank has raised by selling such bonds, which were issued under the new RBI guidelines for lending to infrastructure and affordable housing projects.
Axis Bank had taken approval from its board of directors to raise up to Rs. 6,000 crore by selling such bonds. The bonds opened for subscription on November 20 and closed on Wednesday.
Under a similar bond issue, ICICI Bank had raised Rs. 3,900 crore in September by selling 10-year bonds at an annualised yield of 9.25%.
The Axis Bank transaction saw investor participation from Life Insurance Corporation, International Finance Corporation, Washington (IFC-W) and other Pension, Provident Funds, Mutual Funds, Multilateral Financial Institutions, Foreign Financial Institutions (FII’s) and Insurance Companies. It is the single largest issue by any private sector issuer in recent times of Senior Unsecured Redeemable Non-Convertible Debentures, the statement said.
“The NCDs are issued in Rupee at a fixed coupon and the proceeds shall be utilised for enhancing long term resources for funding infrastructure and affordable housing,” Axis Bank said.
Sidharth Rath, President - Treasury, Business Banking & Capital Markets, Axis Bank said, “We are pleased to have received a very good response for the infrastructure bonds from the domestic as well as foreign investors. This issue was launched immediately after our recent international bond offering and generated a very good response...”
Earlier this year, RBI had allowed banks to raise funds by selling special long-term bonds that are exempt from cash reserve ratio (CRR) and Statutory Liquidity Ratio (SLR) requirements. The funds raised are also exempt from priority-sector norms under which banks have to channel 40% of the loans to agriculture, small businesses and weaker sections of society, making the sale of these bonds attractive for banks that finance infrastructure projects.
With weak credit demand, most banks are waiting for a policy rate cut and sensing the market conditions before raising such bonds so as to get a better pricing.
Source : Thehindubusinessline
The senior unsecured redeemable non-convertible debenture issue was priced at 8.85% p.a. (fixed coupon) payable annually maturing on December 05, 2024. The NCD’s are rated AAA by CRISIL & ICRA. The NCDs shall be allotted to eligible investors on December 05, 2014, Axis Bank said in a statement.
It’s the highest amount a bank has raised by selling such bonds, which were issued under the new RBI guidelines for lending to infrastructure and affordable housing projects.
Axis Bank had taken approval from its board of directors to raise up to Rs. 6,000 crore by selling such bonds. The bonds opened for subscription on November 20 and closed on Wednesday.
Under a similar bond issue, ICICI Bank had raised Rs. 3,900 crore in September by selling 10-year bonds at an annualised yield of 9.25%.
The Axis Bank transaction saw investor participation from Life Insurance Corporation, International Finance Corporation, Washington (IFC-W) and other Pension, Provident Funds, Mutual Funds, Multilateral Financial Institutions, Foreign Financial Institutions (FII’s) and Insurance Companies. It is the single largest issue by any private sector issuer in recent times of Senior Unsecured Redeemable Non-Convertible Debentures, the statement said.
“The NCDs are issued in Rupee at a fixed coupon and the proceeds shall be utilised for enhancing long term resources for funding infrastructure and affordable housing,” Axis Bank said.
Sidharth Rath, President - Treasury, Business Banking & Capital Markets, Axis Bank said, “We are pleased to have received a very good response for the infrastructure bonds from the domestic as well as foreign investors. This issue was launched immediately after our recent international bond offering and generated a very good response...”
Earlier this year, RBI had allowed banks to raise funds by selling special long-term bonds that are exempt from cash reserve ratio (CRR) and Statutory Liquidity Ratio (SLR) requirements. The funds raised are also exempt from priority-sector norms under which banks have to channel 40% of the loans to agriculture, small businesses and weaker sections of society, making the sale of these bonds attractive for banks that finance infrastructure projects.
With weak credit demand, most banks are waiting for a policy rate cut and sensing the market conditions before raising such bonds so as to get a better pricing.
Source : Thehindubusinessline
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