State-run lender Canara Bank has decided to raise Rs 400 crore with a greenshoe option of another Rs 200 crore through a tier I bond issue.

The main objective of the bond issue is to augment tier I capital for strengthening the capital adequacy and enhancing long term resources of the bank.

The bank will offer a coupon rate of 9.10 per cent per annum for first 10 years, and the debentures will be listed at NSE. The bond issue are rated 'AAA' by Crisil and 'AAA-+' by Brickwork Ratings.

Darashaw Securities, Trust Investment Advisor Pvt. Ltd, SBI Cap Securities, Axis Bank and Standard Chartered Bank will serve as arrangers to the issue.