Bank of Maharashtra, Canara Bank eye dollar debt issuance this month, bankers say

MUMBAI: Two Indian state-run lenders, Canara Bank and Bank of Maharashtra, are set to raise $500 million each through the sale of U.S. dollar-denominated bonds over the next few days, two merchant bankers said on Monday.

Both the lenders will look to raise funds through a sale of three-year or five-year papers, or a combination of both, under the central bank’s concessional swap window, which lowers the cost of hedging the risk of unfavourable currency moves, the bankers added.

The bankers requested anonymity as the matter is still private, while neither of the lenders responded to a Reuters request for comment.

Though this would be Bank of Maharashtra’s debut issue, this would Canara Bank’s second issuance this year, and both the debt sales are expected to be completed in September, the bankers said.

Canara Bank rides dollar debt wave under RBI subsidy scheme, bankers say

Fitch Ratings has assigned Bank of Maharashtra’s $500 million medium-term note (MTN) programme a ‘BBB-minus’ rating and the bank will use the net proceeds of the notes to meet the funding requirements of its head office in India, foreign offices and general corporate purposes.

In July, Canara Bank raised $200 million via private placement under the central bank’s concessional swap window, at a spread of 87 basis points over the corresponding U.S. Treasury yields, and this was its first such issuance since September 2024.

Last week, the board of Canara Bank approved raising up to $2 billion through sale of foreign currency bonds.

Indian lenders have already raised $13 billion through dollar bonds so far in 2026, of which $12.15 billion were raised in June to August, after the Reserve Bank of India announced the concessional swap window.

State Bank of India, Bank of Baroda and Union Bank of India are the other lenders that have tapped dollar debt market in 2026.