Punjab National Bank sets 7.89% coupon for Tier II bonds - traders

India's Punjab National Bank PNB has set 7.89% coupon for Basel III-compliant Tier II bonds maturing in 15 years, three merchant bankers said on Wednesday.

The state-run lender had invited coupon and commitment bids from bankers and investors earlier in the day and has accepted bids worth 40 billion rupees ($490.23 million), they said.

The notes are rated AA+ by CARE Ratings, and the issue will close for subscription on Thursday.

The issue has a call option at the end of 10 years.

In September, the bank had raised 6.58 billion rupees through Basel III-compliant additional Tier I perpetual bonds at an annual coupon of 8.30%. The issue has a call option at the end of five years.

($1 = 81.5950 Indian rupees)