This PSU lender raises ₹663 crore from Tier 1 bonds

Union Bank of India has said in a stock exchange filing that “Pursuant to Regulation 30 of the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015, we wish to inform you that the Bank has allotted Unsecured, Subordinated, Non-Convertible, Perpetual, Taxable, Fully Paid-Up Basel III Compliant Additional Tier 1 Bonds in the nature of Debentures eligible for inclusion in Tier 1 Capital (“Bonds”) Series XXXVII aggregating to Rs.663 Crore (ISIN : INE692A08227) on December 23, 2022.”

On Wednesday, the bank informed stock exchanges that it has considered the issuance of Basel III Compliant Debt Instrument in the nature of Debentures eligible for inclusion in Additional Tier-1 Capital (“Bonds”) Series XXXVII with Base issue of Rs.200 crore and Green Shoe Option to retain oversubscription upto Rs.580 crore aggregating to Rs.780 crore on Private Placement basis. The accepted bid for this issue was Rs.663 Crore and the bond have been rated “CRISIL AA /Stable” by CRISIL Ratings Ltd and “IND AA/Stable” by India Rating & Research Pvt. Ltd. The bonds had an annual coupon rate of 8.40%, and the pay-in date/deemed date of allotment was set as December 23, 2022.

Recently on 20th December, Tuesday, Union Bank of India said in a stock exchange filing that it “has subscribed 2,00,80,000 Equity Shares of Star Union Dai-Ichi Life Insurance Company Ltd. (SUD life) offered under rights issue by the Company at ₹25/- per share aggregating to ₹50.20 Crores.”

Union Bank of India has a stake of 25.10% in SUD Life and the bank has informed stock exchanges that it has subscribed to the rights issue offered by SUD Life i.e. 200,80,000 equity shares at Rs.25 per share of Rs.10 each aggregating Rs.50.20 Cr. The time period for completion of the transaction is from 13th December 2022 to 11th January 2023.

The shares of Union Bank of India Ltd closed today at ₹68.10 apiece level, down by 10.57% from the previous close of ₹76.15. The stock recorded a total volume of 51,880,207 shares compared to the 20-Day average volume of 33,949,436 shares. On a YTD basis, the banking stock has rallied 54.25% so far in 2022.