Canara Bank hits overseas bond market with $400-mn issue

Canara Bank has hit the international debt market with a benchmark dollar bond issue that will have a tenor of 5 years. Through this issue, Canara Bank will raise $400 million as part of its $2 billion medium-term note programme. A medium-term note (MTN) is a debt note that usually matures (is paid back) in 5–10 years.

About Canara Bank’s $400 million Bonds Issue:

Bond sale will be drawn through London branch of Canara Bank.The bonds will be listed on the Singapore Stock Exchange.

• Foreign rating agency Moody’s has assigned a Baa3 rating to the issue, which is on par with the sovereign rating since majority stake in the bank is owned by the Indian government.
• Moody’s has mentioned that the rating of this bond issue is on account of Canara Bank’s Ba3 baseline credit assessment (BCA).
• Canara Bank’s BCA of Ba3 is underpinned by its weak asset q Even though its gross non-performing assets (NPA) ratio is somewhat better than domestic peers, it is significantly weaker as compared to Ba3 global peers.
• Moreover, Canara Bank’s provisioning levels and capital buffers are lower compared with similarly rated peers.
• Another international Fitch Ratings has also assigned a rating of BBB — on par with the sovereign rating.
• It is to be noted that this is the second fund raising by Canara Bank.

About Canara Bank:

Canara Bank is one of the major public sector banks owned by the Government of India.It was established at Mangalore, Karnataka in 1906.

• Headquarters of Canara Bank is located in Bengaluru, Karnataka.
• T N Manoharan is the current Chairman of Canara Bank and Rakesh Sharma is the current MD & CEO.
• “Together We Can” is the tagline of Canara Bank.
• As of June 30, 2017, the bank had a network of 6089 branches and more than 10519 ATMs spread across India.
• Canara Bank also has offices abroad in London, Hong Kong, Moscow, Shanghai, Doha, Bahrain, South Africa, Dubai, Tanzania and New York.