MUMBAI, February 19: Dena Bank is launching a Rs 200 crore debt issue at 14.25 per cent. The Mumbai-based nationalised bank, which went public last year, is raising Tier-II capital with a 63-month maturity. The issue, slated to open on February 23, will boost the capital adequacy ratio of the bank.The subordinated debt issue is being lead managed by SBI Capital Markets. The other merchant bankers associated with the issue are DSP Merrill Lynch, ICICI Securities and UTI Securities. The paper has been rated with a LAA by ICRA.
The issue will have a core size of Rs 100 crore and carry a greenshoe option of another Rs 100 crore. Last year, the bank raised Rs 180 crore from the capital market through its maiden equity issue. The bank has posted an operating profit of Rs 133.94 crore in the first nine months of the current financial year. The advance portfolio of Dena Bank rose by 18.2 per cent during the first three quarters (April-December) to Rs 4,781 crore and deposits went up to Rs 8,871 crore during theperiod. "The issue is likely to be subscribed by banks and financial institutions. We should not have any problem in selling the issue," a source in one of the lead managers said.
GE Capital has already entered the debt market to raise Rs 100 crore at a coupon of 14 per cent. The non-banking finance company, which has got P1+ rating from Crisil, is raising 90-day money.
The largest finance company in India has decided to take full advantage of the volatile money market conditions to raise debt.
"Instead of getting locked in long-term debt of five years at the same coupon rate, GE Caps wants to raise short term debt and get out of it when conditions stabilise," a source associated with a the deal said.
The lead managers -- DSP Merrill Lynch and ANZ Grindlays -- are adjusting the upfront yield on a weekly basis in line with the response to the debt issue.
"The issue has so far received good response and we are confident of getting Rs 100 crore as it has an attractive price," a source handling the GECaps issue said. The commercial paper market is virtually dead after the tight money measures announced by the RBI in mid-January.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
