PNB raises Rs 974 cr Through AT-1 bonds

Current Context: Punjab national bank’s issue of AT-1 bonds at 8.75% coupon is the first in India after the crisis at Credit Suisse.

• Punjab National Bank raised Rs 974 crore through additional tier-1 bonds at 8.75% coupon rate. It is 35 basis points higher than its previous bond in December.
• The bank will raise up to Rs 2,000 crore via AT-1 bond auctions, with the issue’s base size being Rs 500 crore.
• The rating agencies have rated the bonds as “AA+” by India Ratings, and “AA” by CARE Ratings. AT-1 bonds have a call option after five years. They are called perpetual in nature because these bonds have a 100-year maturity period.
• PNB issue has raised Rs 974 crore at 8.75% in the current scenario.
• The issue pricing is higher than their previous issue , the reason being due to two repo hikes . Indian banks have raised Rs 34,394 crore via AT-1 bonds in FY23.
• Other banks such as, UCO Bank has raised Rs 500 crore at 9.50% rate while State Bank of India raised Rs 3,717 crore at a rate of 8.25% earlier in march . SBI raised a tranche of Rs 4,544 crore at a coupon of 8.20% in February.

Question:

Q.1 PNB raises _______ through AT-1 bonds
a. 978 crores
b. 974 crores
c. 300 crores
d. 400 crores