Business Desk :
Bangladesh’s first ever tier-one mudaraba perpetual bond has received the nod from the Bangladesh Securities and Exchange Commission (BSEC) for a Tk 600 crore fund to be raised.
Tier-I capital consists of equity and perpetual debt securities, which are similar to equity in nature.
The stock market regulator on Sunday approved the bond of Exim Bank in a commission meeting chaired by BSEC Chairman Prof Shibli Rubayat-Ul-Islam.
Last July the BSEC decided that all perpetual bonds issued by banks must be tradable in the main board of the stock exchanges.
The Exim Bank mudaraba perpetual bond is characterised as unsecured and contingent-convertible BASEL-III compliant.
The bond’s coupon rate ranges from 6 per cent to 10 per cent and it will be traded in stock exchanges once listed, said the BSEC in a press release.
The fund would be raised through issuing the bonds among public sector financial institutions, mutual funds, insurance companies, scheduled and rural banks, trusts and eligible investors through private placement.
The fund would be utilised to strengthen Exim Bank’s additional tier-one capital base. The face value of each unit would be Tk 10 lakh.
This is the first ever tier-one mudaraba perpetual bond set to be listed, said Ershad Hossian, CEO of City Bank Capital Resources.
The merchant bank is working as the arranger whereas Green Delta Insurance trustee. “We are working first for raising funds for strengthen tier one and two of capital base,” he said.
Since last year, the country’s commercial banks have begun receiving regulatory approval for perpetual bonds.
Eight banks are raising funds of Tk 3,600 crore.
They are City Bank, Jamuna Bank, Exim Bank, Mutual Trust Bank, Trust Bank, One Bank, First Security Islami Bank and Social Islami Bank.
