Bank of Baroda has announced the successful issuance of Senior Unsecured Fixed Rate Notes worth a total of USD 700 million under its Medium Term Note (MTN) programme.
Details of the Bond Issue
The bank has issued USD 400 million of bonds with a maturity period of three years. These bonds carry a fixed coupon rate of 5.114% per year, with interest payable every six months.
The bank has also issued another USD 300 million of bonds with a maturity period of five years. These bonds carry a coupon rate of 5.318% per year, also payable semi-annually.
Bonds to Be Issued Through IFSC Banking Unit
Bank of Baroda said that the bonds will be issued through its IFSC Banking Unit (IFSCBU) branch from 20 August 2026. The bonds will be listed on the Singapore Stock Exchange, India International Exchange (India INX) and NSE International Exchange (NSE-IX) at GIFT City.
What is Medium Term Note (MTN) Programme?
A Medium Term Note (MTN) programme is a flexible debt-raising arrangement under which a company, bank, or other eligible institution can issue debt securities (notes) from time to time, instead of issuing the entire amount in one go.
How it works?
Under an MTN programme, the issuer first establishes a programme with a specified maximum amount. After setting up the programme, it can issue notes whenever it needs funds, depending on market conditions and its funding requirements.
For example, a company may establish an MTN programme of ₹1,000 crore. It can then issue ₹200 crore, ₹300 crore, or other amounts at different times, rather than raising the entire ₹1,000 crore at once.
Example
Suppose Bank ABC needs ₹500 crore over the next two years. Instead of borrowing ₹500 crore immediately, it establishes an MTN programme for ₹500 crore.
It may issue:
₹100 crore in January
₹150 crore after six months
₹250 crore later
Thus, the bank can raise money as and when required under the same programme.
