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The Financial Express
Swasti Lankabangla Swasti Lankabangla

Transactions of all perpetual bonds thru' main trading platforms

BSEC moves to formulate rules

| Updated: July 16, 2020 09:53:54


BSEC moves to formulate transaction rules for perpetual bonds

The securities regulator has moved to formulate rules for transactions of all perpetual bonds through the main trading platforms of the stock exchanges.

The Bangladesh Securities and Exchange Commission (BSEC) on Sunday took this decision at a meeting held at its office.

"All perpetual bonds issued by banks will have to be transacted through the main trading platforms of the stock exchanges," the BSEC said.

A perpetual bond is a fixed income security which is often considered a type of equity. The major benefit of this security is that they pay a steady stream of interest payments.

Banks mainly issued the perpetual bonds, approved by the securities regulator, to strengthen their capital base as per the capital requirements set by the central bank.

The incumbent commission of the securities regulator has taken the initiative for commencing transactions of perpetual bonds following the long standing demand of making the bond market popular.

The government has also announced some measures in the budget for the fiscal year 2020-21 to make the bond market popular.

At Sunday's meeting, the securities regulator also approved two proposals of perpetual bonds to be issued by One Bank and Mutual Trust Bank (MTB).

One Bank will issue perpetual bond worth Tk 4.0 billion. The characteristics of the bond are unsecured, non-convertible, base-III compliant, floating rate.

The bond will be issued to, among others, state-owned financial institutions, mutual funds, insurance companies, listed banks, trust, and corporations through private placements.

The offer price of the bond to be issued by One Bank is Tk 1.0 million per unit.

The MTB will also issue perpetual bond worth Tk 4.0 billion. The characteristics are unsecured, non-convertible, and Basel-III complaint.

The bond will be issued to financial institutions, mutual funds, insurance companies, listed banks, trust, and corporations through private placements.

The price of the MTB's bond is Tk 1.0 million per unit.

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