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The country’s stock market watchdog has approved Beximco’s proposal to issue zero-coupon bonds worth Tk 26.25 billion.
At the same meeting, the Bangladesh Securities and Exchange Commission (BSEC) also approved the rules for the Real Estate Investment Trust Fund (REIT), which will open up opportunities for general people to get dividends from real-estate investments.
Zero-coupon bonds
If Beximco can sell the targeted number of bonds, it will receive Tk 15 billion, from bond investors, and will be bound to pay back Tk 26.25 billion at maturity, with 15 per cent interest rate.
The zero-coupon bonds will be sold through private placements.
Institutional investors and high net worth individuals will be able to invest in the bonds.
The issue price of each bond will be Tk 50,000.
Trustee of the bond will be Shandhani Life Insurance Company and arranger will be IFIC Investment Limited.
The fund would be spent on paying back bank loans partially while the rest would be invested in a new township project - 100-acre Sreepur Township Ltd in Gazipur.
The project will build 18,000 apartments along with healthcare, education, entertainment, sports and recreation centres.
Since zero-coupon bonds are a kind of debt security that is issued at a deep discount, rather than giving monthly interest, bond purchasers will get the yield at maturity.
Beximco 1st Zero Coupon Bond will have a maturity period of five years and investors will get the principal amount plus return as a one-time payment.
The bonds to be issued will be non-convertible and non-tradable, meaning the securities will not be converted into shares, will not be listed and will not be exchangeable.
Real Estate Investment Trust Fund
The rules of REIT will be published soon.
Under “Bangladesh Securities and Exchange Commission (Real Estate Investment Trust Fund) Rules, 2024”, funds will be collected from general investors, similar to mutual funds by issuing units. They will get dividends against their funds collected for constructing housing and multipurpose complexes.
The investors will also be allowed to transfer their units of the asset-backed securities like the mutual fund units.