Canara Bank to exercise call option on Rs. 1500 crore Basel III AT-I bond on 2 December 2026
Canara Bank will exercise the call option on its Basel III Additional Tier I bond of Rs. 1500 crore, coupon 8.05% p.a., on 2 December 2026.
By ScoutQuest · · 2 min read
- Bond Size
- Rs. 1500 crore
- Coupon Rate
- 8.05% p.a.
- Call Option Date / Record Date
- call date 2 December 2026; record date 17 November 2026
What the bank has decided
Canara Bank has decided to exercise the call option on its Basel III compliant Additional Tier I bond (ISIN: INE476A08134). The instrument was issued on 2 December 2021 for Rs. 1500 crore at a coupon of 8.05% per annum, and is a perpetual instrument. Notice of the call has been given to bondholders.
- Call option date: 2 December 2026
- Record date: 17 November 2026
- The bank has received the necessary approvals from the Reserve Bank of India
Why the bank can call the bond now
As per the terms of the Information Memorandum, the bond carries a coupon of 8.05% p.a. payable annually, and the bank may exercise the call option once the instrument has run for at least 5 years. The instrument was issued on 2 December 2021, so the five-year mark falls on the call option date.
What bondholders receive
- The principal amount together with interest accrued for the period from 02/12/2025 to 01/12/2026 will be paid on 02.12.2026.
- The bond will not carry any obligation from the call option date.
- Payment will be remitted through RTGS/NEFT/Direct Credit in favour of bondholders appearing in the records of NSDL/CDSL as at the close of the record date, after verification and completion of necessary formalities.
- On payment being made, the bank will inform NSDL/CDSL and the bond in the bondholders' accounts will be extinguished.
The bond shall be treated as discharged on payment of the interest-cum-principal amount, which will be a legal discharge of the bank's liability towards holders of the bond. The bank's liability towards all bondholder rights, including for payment, ceases from the call option date. Payment will be subject to the terms contained in the Placement Memorandum.
What this means in simple terms
A call option lets the issuer repay a bond early on a set date. Here, the bank is using that option to repay the Rs. 1500 crore AT-I bond along with the interest due for the year, and the instrument will stop existing after that. For a holder of this bond, the payout date and record date are the two dates to note. For a shareholder, this is an update on the bank's capital instruments.
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More numbers
- Basel III AT-I bond issued amount1500
- Coupon rate on the AT-I bond8.05
- Minimum run period before call option5 years
- Bond issue amount stated in bondholder noticeRs. 1500 Crore
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