Bank of India has successfully completed its Basel III compliant Tier II Bonds issue worth Rs 2,500.00 crore, receiving an overwhelming response from investors. The issue was oversubscribed by 4.98 times against the base issue size, with total bids amounting to Rs 4,982.00 crore. The bank has officially informed stock exchanges about the completion of this private placement issue.

Bond Issue Details

Investor Response and Allotment

The bond issue witnessed exceptional investor interest, reflecting strong confidence in Bank of India's creditworthiness. The bank received 68 bids totaling Rs 4,982.00 crore, significantly exceeding the base issue size of Rs 1,000.00 crore. Out of these, the bank accepted 29 bids worth Rs 2,500.00 crore at a coupon rate of 7.28%. The bonds were allotted to 14 institutional investors on a private placement basis, with the bidding process conducted through the NSE Electronic Bidding Platform.

Regulatory Compliance and Rating

The [ICRA]AA+ rating indicates very low credit risk and validates Bank of India's strong capacity to meet its financial commitments. This high credit-quality rating applies specifically to the Basel III compliant Tier II Bonds, which serve as regulatory capital instruments to enhance the bank's capital adequacy under international banking norms.

Strategic Implications

This successful bond issuance strengthens Bank of India's regulatory capital base and demonstrates the market's confidence in the bank's financial health. The Basel III compliant nature of these Tier II bonds ensures adherence to international banking regulations designed to improve the banking sector's resilience to financial stress. The overwhelming subscription response and competitive coupon rate of 7.28% reflect the bank's strong market standing and investor trust in its long-term stability. The bank has duly informed both NSE and BSE about the completion of this capital-raising exercise through official regulatory filings.

Bank of India , a prominent public sector bank, has received a vote of confidence from CARE Ratings Ltd., which has reaffirmed and assigned credit ratings for the bank's Basel-III compliant Tier II Bonds and Long Term Infrastructure Bonds. The ratings agency has maintained an 'A+' rating with a stable outlook across multiple bond series, signaling a positive assessment of the bank's financial stability and creditworthiness.

Rating Details

CARE Ratings' evaluation encompassed various bond series issued by Bank of India. Here's a breakdown of the rating actions:

The reaffirmation applies to six existing bond series, while the new Tier I Bond issue and Certificate of Deposit received fresh ratings. All rating actions were verified simultaneously, providing a comprehensive assessment of the bank's debt instruments.

Implications for Investors

The 'A+' rating with a stable outlook is a positive indicator for investors and stakeholders. It suggests that CARE Ratings considers Bank of India to have:

• Adequate capacity to meet its financial commitments
• Relative stability in its financial position
• Compliance with regulatory requirements, particularly concerning Basel-III norms

This rating reaffirmation may potentially enhance investor confidence in Bank of India's debt instruments and overall financial health.

Regulatory Compliance

Bank of India's disclosure of this rating information aligns with the Securities and Exchange Board of India (SEBI) listing regulations. This transparency demonstrates the bank's commitment to keeping investors and the market informed about its financial instruments and credit standing.

As the banking sector continues to navigate through various economic challenges, such rating affirmations become crucial indicators of a bank's resilience and financial stability. Investors and market watchers will likely keep a close eye on Bank of India's performance and future rating assessments as indicators of its ongoing financial health and market position.