 Mumbai:
UTI Bank will raise $150 million through foreign currency-denominated
bonds for Tier II capital requirements in the second quarter
(July-September 2006). The private sector bank also plans
to raise $45 million through Tier I perpetual issue of
foreign currency. The 15-year Tier II subordinated bonds,
with a call option after 10 years, would be part of UTI
Bank''s medium-term note programme.
UTI
Bank''s board approved plans to raise funds through upper-end
Tier-II bonds for its overseas programmes and a domestic
issue of bonds for hybrid Tier-I capital amounting to
Rs866 crore. While upper-end Tier-II bonds usually have
a 15-year tenure, hybrid Tier-I capital is perpetual.
Barclays
Capital, Citigroup and Deutsche Bank are the joint arrangers
and joint lead managers for the subordinated debt issue.
Market
sources said the coupon is expected to be 100 basis
points higher after 10 years, if the call option is
not exercised.
The
rates are linked to London inter-bank offered rate (Libor)
and the bank expects to save over 200 basis points in
interest costs compared with the coupon rates (interest
rates) prevailing in the domestic market, UTI Bank officials
said.
Marketing
of the bond issue will begin in Hong Kong, before moving
on to Singapore and London. The issue is tentatively
planned to close before the end of the week, market
sources said.
UTI
plans to use the capital to expand its international
business. The bank
at present has a branch in Singapore and representative
office in Shanghai. UTI Bank plans to establish a presence
in Dubai and Hong Kong.
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