AK Capital Services wins India Bond Award 2006 from IFR

AK Capital Services has won International Financing Review (IFR) Asia’s India Bond Award for the year 2006. AK Capital has won the award for structuring and placing Rs. 1500 crores worth of perpetual bond issuance from UCO Bank in March 2006.

The UCO Bank transaction was India’s first perpetual bond issuance, after Reserve Bank of India issuing guidelines for same. These instruments are eligible for inclusion as Tier-I capital of banks. AK Capital, one of India’s leading debt arrangers, received this award in Hong Kong on February 5, 2007.

The Rs. 1500 crore-bonds of UCO Bank, rated ‘AA’ by CRISIL and ’AA-‘ by CARE, were perpetual in nature with a call option at par at the end of 10th year from the Deemed Date of Allotment. The bonds carried an interest rate of 9.50% pa, payable semi-annually, for the first 10 years and step-up coupon rate of 10.00% pa, payable semi-annually for all the subsequent years if call option is not exercised by the Bank at the end of 10th Year from the Deemed Date of Allotment. The bonds listed on the WDM segment of National Stock Exchange were reckoned as a part of Tier-I Capital of UCO Bank.

Read the release on Moneycontrol.com.

Syndicate Bank to raise Rs. 240 crores in Tier-II bonds

Syndicate Bank is raising funds to the tune of Rs. 240 crores from the bond markets by issuing upper-tier bonds with a 15-year maturity. It will have the right to call back the bonds after 10 years.

Syndicate Bank will exhaust its capacity to raise Tier-II bonds this fiscal if it raises Rs. 240 crores. The bank is eligible to raise upto Rs. 150 crores through hybrid perpetual bonds which qualify for Tier-I capital. The bank’s Rs. 240 crore-issue includes a Rs. 140 crore-green shoe option. The bank has fixed the coupon at 9.3% for the first 10-year period. After the 10-year period, if the bank decides against exercising the call option, it will step up the coupon by another 50 basis points (bps).

The bond issue proceeds would help Syndicate Bank fund its business growth and augment long-term resources. After the fund-raising, the bank’s capital adequacy ratio, currently at 11.34% will increase by 20-30 bps. The issue is being managed by AK Capital Services, Citibank, Darashaw, HSBC, IDFC, Standard Chartered Bank and UTI Bank. Syndicate Bank, with government holding of 66.5%, will also have the option of going public with a follow-on offer next year. It can offload government stake by another 14.5%.

Read The Economic Times article.