The coupon rate - or the rate of interest paid to investors - was set at 8.34%, the country s largest lender said. The securities, which are perpetual bonds, have a call option after 10 years and every anniversary thereafter.
“Bidding for the debt sale is likely on January 17th. It will be an AT-1 issuance with a call option after 10 years and every year thereafter,” a source aware of the development said.
These securities, popularly known as AT-1 bonds, are hybrid instruments that are perpetual in nature. These can be written-down under certain scenarios including a depletion of capital, or converted to equity. The amount mobilised through AT-1 bonds is counted as a part of tier-1 capital and enhances the capital adequacy of a bank.
AT-1 bonds are perpetual debt instruments issued by banks to raise money and build up their core equity capital. A perpetual instrument is one with no maturity date, implying that the issuer – a bank in this case – does not pay the principal amount back to investors but makes periodic interest payments throughout the life of the bond.
A bench led by Chief Justice DY Chandrachud admitted the governments appeal and tagged it along with similar appeals filed by RBI and Yes Bank, It also posted the matter for further hearing on October 16. The apex court had in March extended the stay granted by the HC on January 20.