Five banks to raise Tk 20b through bonds

Five listed banks have received approval of the securities regulator to raise Tk 20 billion in total by issuing subordinated bonds to strengthen their Tier-II capital base under Basel-III norms.

The approval came at a meeting of the Bangladesh Securities and Exchange Commission (BSEC) on Tuesday, presided over by Chairman Khondoker Rashed Maqsood.

The banks are Dhaka Bank, Bank Asia, Islami Bank Bangladesh, Exim Bank and Trust Bank. The bonds will be listed on the Alternative Trading Board (ATB) of the bourses as per the regulatory conditions.

Buyers of such subordinated bonds accept a lower claim on the company's assets, after senior debt holders, but they are still above general shareholders.

Basel III is a set of reform measures intended to improve regulation, supervision, and risk management in the global banking sector.

Dhaka Bank

It will issue unsecured, non-convertible, floating rate fully-redeemable fourth subordinated bonds amounting to Tk 4 billion.

The bonds will be issued to institutions and high net-worth individuals through private placements at a face value of Tk 1 million per unit.

DBH Finance is working as trustee of the bonds while UCB Investments and BRAC EPL Investments are working as an arranger.

Bank Asia

The stock market regulator has also approved the proposal of Bank Asia to raise Tk 4 billion through issuance of unsecured, non-convertible, floating rate fully redeemable subordinated bonds.

The units of the bond will be sold to institutions and high-net worth individuals through private placements. The face value of the bonds will be Tk 10 million per unit.

BRAC EPL Investment is acting as the trustee of the bonds, while City Bank Capital Resources is the arranger.

Islami Bank

Islami Bank will issue Mudaraba unsecured, non-convertible, fully redeemable floating rate fifth subordinated bonds amounting to Tk 5 billion.

The coupon rate will be a reference rate plus a 3 per cent margin.

Again, the units will be sold to institutions and high net-worth individuals through private placements at a face value of Tk 0.5 million each.

DBH Finance is working as trustee of the bonds while UCB Investment and Prime Bank Investment are arrangers.

Exim Bank

Export Import Bank of Bangladesh has been allowed to raise Tk 2.5 billion through issuance of unsecured, non-convertible, redeemable floating rate subordinated bonds.

The units will be sold to institutions and high-net worth individuals at a face value of Tk 0.5 million each.

The coupon rate will be a reference rate plus 3 per cent coupon margin.

DBH Finance is the trustee of the bonds, while UCB Investment is the arranger.

Trust Bank

It will raise Tk 4.5 billion through unsecured, non- fully redeemable, floating rate subordinated bonds.

The units will be sold to institutions and high-net worth individuals at a face value of Tk 0.5 million each.

The coupon rate will be a reference rate plus a 3 per cent coupon margin.

BRAC EPL Investments is acting as the trustee of the bonds, while UCB Investment is the arranger.

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