707249 SIP myths you must know!

Private sector lender HDFC Bank on Thursday fixed the coupon rate of its $1 billion additional tier- I (AT-1) bonds at 3.70% per annum. The pricing initially offered was 4.125%, but due to the high demand the pricing was reduced by 0.42%. The bank is considered as the most valuable and is likely to retain only $1 billion out of the bids, dealers said. Top bidders include GIC Singapore, HSBC GLobal Asset Management, JP Morgan, Blackrock and Fidelity Investment.

Earlier in April, the bank had informed that it is planning to raise up to Rs 50,000 crore during the next 12 months through issuing bonds.

“The bank proposes to raise funds by issuing perpetual debt instruments (part of additional tier-I capital), tier-II capital bonds and long-term bonds (financing of infrastructure and affordable housing) up to a total amount of Rs 50,000 crore over the period of the next 12 months through the private placement mode,” it had said. Perpetual bonds carry no maturity date, so they may be treated as equity, not as debt.

Moody’s give Ba3 rating for the additional tier 1 notes

The notes will be listed on the India International Exchange (IFSC) Limited, HDFC Bank said in a regulatory filing. The US dollar-denominated, direct, subordinated, unsecured, Basel III Compliant, additional Tier 1 bonds are rated Ba3 by Moody’s Rating Services, it added.

The perpetual bonds will not be offered or sold in India under the applicable laws, including the Companies Act, 2013, as amended from time to time, it said.