Canara Bank completes ₹2,042 crore AT1 bond issue at 8.10% coupon
- Canara Bank completed a ₹2,042 crore Additional Tier I bond issue
- The bank received 111 bids from 29 allottees for the Basel III compliant instruments
- Bonds carry a fixed coupon rate of 8.10% and are perpetual in nature
- Issuer call option available starting September 18, 2031
*this image is generated using AI for illustrative purposes only.
Canara Bank completed its ₹2,042 crore Additional Tier I (AT1) bond issuance on September 16, 2026. The public sector lender secured interest from 29 allottees who submitted 111 bids for the Basel III compliant instruments.
The issue included a base amount of ₹2,000 crore and a green shoe option of ₹42 crore. Although the total issue size was capped at ₹4,500 crore, the bank accepted bids only up to the ₹2,042 crore limit. The bonds carry a fixed coupon rate of 8.10% and are unsecured, subordinated, and perpetual in nature.
Issue Structure and Terms
The bank issued debentures with a face value of ₹1 crore each. Allotment is deemed effective as of September 18, 2026, which also serves as the pay-in date. Interest payments will be made annually on September 18 every year.
| Parameter | Details |
|---|---|
| Issue Size | ₹2,042 crore |
| Coupon Rate | 8.10% |
| Tenor | Perpetual |
| Total Bids | 111 |
| Allottees | 29 |
| Listing | NSE |
Call Option and Maturity
The instruments are perpetual but include an issuer call option. Canara Bank may redeem the bonds starting from September 18, 2031, marking the fifth anniversary of the deemed allotment date. The bank retains the right to call the bonds on any subsequent anniversary date.
Regulatory Compliance
The issuance adheres to SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The bonds are proposed for listing on the National Stock Exchange of India Ltd upon completion of allotment procedures.
Historical Stock Returns for Canara Bank
| 1 Day | 5 Days | 1 Month | 6 Months | 1 Year | 5 Years |
|---|---|---|---|---|---|
| -0.10% | -0.66% | -5.58% | -9.37% | +6.48% | +280.28% |
How will the 8.10% coupon rate on these AT1 bonds impact Canara Bank's net interest margins and overall profitability in the coming fiscal years?
What does the decision to cap the issue at ₹2,042 crore despite a ₹4,500 crore limit suggest about the bank's current capital adequacy needs versus market appetite?
How might this issuance influence the pricing and demand for upcoming AT1 bond issues by other public sector banks in India?
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