Mumbai: Public Sector Banks have successfully rolled out their AT-1 (Tier-1) bonds scheduled for call options in FY22.
These bonds have received poor publicity last year after the failure of the bank yes yes producing RS 8,415 crore bonds in 1 written to zero and investors in it get a worse agreement than equity investors.
Removal also resulted in revising norms for investment by debt mutual funds in this quasi-equity instrument issued by the bank.
Circular also revised the norms for eternal bond assessments issued by various issuer classes (banks, NBFC and corporations).
According to a report based on the rating of the ICRA body, because mutual funds are a large investor segment in this bond, this change is expected to have an impact on demand for this instrument issued by the Bank.
According to Estimated ICRA, RS 20,505 Crore Bonds PSBS and RS 7,925-Crore Private Banks are caused by the implementation of the call option (after five years from publishing) at FY22 with the majority of Rs 19,750 Crore at H2 FY22.
ICRA associates the success of publishing on relatively better returns than this bond offered.
The debt interest rate has fallen after the RBI relieves liquidity conditions after the pandemic.
However, all PSB that has bonds that appear for collectively managed payments raising RS 24,471 Crore through the new AT-1 bond problems effectively rolling on their loans.
In the private sector, two banks (AXIS and HDFC Bank) raised Rs 12,371 crore.
Compared to this, private banks have collected Rs 7,925 Crore through AT-1 bonds at FY21.
“Given the impact of the pandemic and weaknesses felt in the financial PSBS compared to their private colleagues, the upcoming rollover and revision regulations are expected to cause challenges.
However, all PSB has largely raised new AT-I bonds that are almost equivalent to the call option Because at FY22, which is likely to preserve their capital ratio, “ICRA said.