City Bank Limited has announced the coupon rate at 9.58% of its perpetual bond, which is being traded on the Dhaka Stock Exchange (DSE), for the first six months of its financial year starting in March.
On 4 August, the bond's trustee board approved the coupon rate, where the coupon range of the bond is from 6% to 10%.
To get the semi-annual coupon payment, the bond's unitholders should hold their stake until 29 August.
A coupon is the interest payment received by a bondholder from the date of issuance until the date of maturity of a bond
Earlier, on 20 June, City Bank perpetual bond started trading on the country's premier bourse, priced at Tk1 lakh per unit.
A perpetual bond is a hybrid security with no maturity date that has debt and equity characteristics. These types of bonds are not redeemable, instead, they provide a never-ending stream of interest payments.
City Bank, a publicly listed private commercial bank initiated the issuance process of the bond in 2019. It was a first-of-its-kind instrument that was never seen in the country before.
With approvals from the Bangladesh Bank and the Bangladesh Securities and Exchange Commission in August 2020 and December 2020 respectively, the bank completed a successful subscription of Tk400 crore in March 2021 through private placements.
IDLC Investments Limited is the bond's trustee while City Bank Capital Resources Limited is the arranger of the bond.
The bank's consolidated earnings per share (EPS) fell 6% to Tk2.04 in the first half of this year due to lower interest income and higher administrative costs.
Its profit would have been even lower if the bank would not earn more from its foreign currency transactions amid soaring greenback prices.
City Bank had paid 12.50% cash and 12.50% stock dividends to its shareholders for the last year.
Its shares are traded at Tk22.70 on the DSE.