The City Bank zero-coupon bond subscription will end on 31 October this year, which began on 15 September.
Ershad Hossain, chief executive officer of City Bank Capital Resources Limited (CBCRL), confirmed the bond subscription deadline to The Business Standard on Saturday.
The three-year bond worth Tk300 crore is non-convertible, fully redeemable, unsecured and unlisted.
It will be redeemed through five equal payments every six months, starting from the 12th month of issuance, which will ensure ample liquidity for the bondholders, said a press release.
The bond is broken into 1,186 lots, each lot containing 584 units. The per unit Discounted Purchase Price of the bond is Tk4,330, making the total price of a single lot Tk25.3 lakh, the media statement added.
The face value of each unit is Tk5,000 and that of a single lot is Tk29.2 lakh.
City Bank revised the Yield to Maturity (YTM) of the bond from the initial 8.50% to 7.50% and received additional approval on the revised rate from the Bangladesh Bank on 10 June 2020.
Yield to maturity is the internal rate of return (IRR) of an investment in a bond if the investor holds the bond until maturity.
City Bank is the first commercial bank in Bangladesh to get approval from the Bangladesh Securities and Exchange Commission (BSEC) to issue a zero-coupon bond.
M Khairul Hossain, chairman of BSEC approved the bond on 25 February this year in a commission meeting held at the BSEC headquarters.
Earlier in May 2019, the board of directors of City Bank approved the bond issuance.
City Bank aims to expand its business and strengthen its long-term deposit base by issuing the bond to corporate bodies and other eligible investors through private placements.
SBL Capital Management Limited is the trustee and CBCRL is the lead arranger of the bond. Emerging Credit Rating Limited is the credit rating agency for the bond, while Farooq & Associates is the legal adviser for the bond issuance.