IDBI Bank buys back US$ 300 mn senior notes

IDBI Bank informed the exchanges on Thursday that the company has bought back its senior notes listed on Singapore Exchange Securities Trading Limited.

In a press release, the bank stated that on September 25, 2019, it has redeemed US$ 300 million 5.00 per cent Senior Notes which are listed on the Singapore Exchange Securities Trading Limited and issued under its US$ 5 billion MTN Program (ISIN XS1048474396) for an aggregate principal amount of US$ 300,000,000 together with accrued interest from the last interest payment date.

For starters, senior notes are debt securities or bonds where the senior note-holders are the first to be paid if any assets are left over after a company's liquidation, following bankruptcy proceedings. Senior notes are most preferred debts even though these notes pay lower coupon rates of interest than junior unsecured bonds.

The purpose of the purchase of these notes for the company is to provide liquidity to bond holders or may be to manage its capital structure and reduce debt and leverage.

Meanwhile, on September 25, 2019, the bank had announced that it has decided to sell 20 bad loans worth nearly Rs. 9756 crore to asset reconstruction companies, banks, financial institutions and NBFCs. With this, the bank intends to improve its recovery.

On Thursday, the shares of IDBI Bank closed 3.12 per cent down at Rs. 35.70 in BSE. The stock had opened at Rs. 37.20 as compared to the previous close of Rs. 36.85. It hit an intraday high of Rs. 37.20 and intraday low of Rs.34.85.