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

Mumbai: Two Indian state-run banks, Canara Bank and Bank of Maharashtra, plan to issue $500 million each in U.S. dollar-denominated bonds within the coming days, according to two merchant bankers. The lenders intend to raise funds via three-year or five-year bonds, or a mix of both, under the Reserve Bank of India's (RBI) concessional swap window, which helps mitigate currency risk costs, the bankers added, maintaining anonymity as the matter remains private. Neither lender has responded to a Reuters inquiry for comment.

This would mark Bank of Maharashtra's first issuance, while Canara Bank would be conducting its second debt sale this year. Both expected completion dates are September. According to Fitch Ratings, Bank of Maharashtra's $500 million medium-term note (MTN) program has been rated 'BBB-minus'. The bank plans to utilize the proceeds to fund its India headquarters, overseas branches, and general corporate operations.

In July, Canara Bank raised $200 million through a private placement under the RBI's concessional swap window, securing a spread of 87 basis points above the corresponding U.S. Treasury yields—the bank's initial issuance since September 2024. The bank's board approved raising up to $2 billion in foreign currency bonds last week.

So far in 2026, Indian lenders have collectively raised $13 billion through dollar bonds, with $12.15 billion raised between June and August, following the RBI's announcement of the concessional swap window. Other lenders, including State Bank of India, Bank of Baroda, and Union Bank of India, have also tapped the dollar debt market in 2026.