The company has chosen Bank of America Merrill Lynch, Barclays Capital, Citigroup, Deutsche Bank, Standard Chartered and HSBC for the deal, the sources said.

The bank will meet investors but will hold off on issuing a bond until market conditions improve, several sources said.

"We are planning to meet investors in the first week of next month, tentatively," Chairman and Managing Director M.V. Nair told Reuters.

The company would not identify which banks it had picked.

Union Bank is looking to raise funds through a Reg S bond, which means the issue will be open to overseas investors outside the United States, the sources said.

In mid-July, Reuters reported the lender was looking to raise $300 million-$500 million from international bond markets.

UBI's last visit to the international bond markets was in January when it raised 160 million Swiss francs ($201 million) from a 4.5-year bond. That borrowing was the first in the currency from an Indian borrower in 24 years.

The last time Union Bank issued a Reg S bond was in August 2010, when it raised $400 million through a 5.5-year bond issue.

Several Indian borrowers have completed roadshows in recent months but have held back issuance amid market volatility.

Would-be issuers in wait-and-watch mode include Indian Railway Finance Corp (IRFC) and Rural Electrification Corp, top cellular carrier Bharti Airtel, and Essar Group software services firm Aegis, bankers have said.

Offshore bond issuance from India has slowed in the past few months amid volatile markets. Bankers have said they do not expect any new issues in the next couple of weeks with attention still focused on debt worries in the United States and Europe.

Copyright Reuters, 2011