Exim Bank gets BSEC’s nod to issue Tk600cr bond
Each unit of the bond will have a face value of Tk10 lakh
Exim Bank Limited has secured the approval of the Bangladesh Securities and Exchange Commission (BSEC) to issue Shariah-compliant perpetual bonds worth Tk600 crore to strengthen its additional Tier-I capital base.
On Sunday, the securities regulator, in its 766th commission meeting, headed by its Chairman Professor Shibli Rubayat-Ul-Islam, decided to approve the listed Islamic commercial bank's bond issuance.
The unsecured bond's annual return would be 6-10% and the institutional investors and other eligible investors can buy its units through private placement.
Each unit of the bond will have a face value of Tk10 lakh, and will be listed on the stock market following its subscription closure.
The bond is a perpetual one in nature, which means it has no tenure. However, in certain situations, such as a wide mismatch in interest rates, the issuer can recall its units after a decade with the BSEC's approval.
Green Delta Insurance Company Ltd is the trustee of the Exim Bank Mudaraba Perpetual Bond, while local investment bank City Bank Capital Resources Ltd is working as the mandated lead arranger of the bond.
Bangladeshi banks now prefer to issue perpetual bonds as they are in need of strengthening their additional Tier-I capital base and perpetual bond receipts are deemed to be capital instead of debt.
Eight banks are collecting a total of Tk3,700 crore through perpetual bonds, while many more are in pipeline.
Of those, the City Bank Ltd already closed their subscription of Tk400 crore perpetual bonds.
To offer liquidity and ease of buying and selling to the investors, the BSEC has made it mandatory that each perpetual bond by banks will be listed in the main board of stock exchanges.
In a recent meeting between the Bangladesh Bank and the BSEC, regulators decided that the perpetual bond issuer banks will get 30 days for listing the debt securities in the stock market after subscription closure.
However, the deadline will be fixed on a case to case basis and there might be some considerable time extension in appropriate cases, said BSEC officials.
