IFIC Bank to withdraw its Tk1,000cr perpetual bond application
The withdrawal was required since another application is under process to issue a non-convertible subordinated bond of Tk500 crore
IFIC Bank will withdraw the application it had submitted to the Bangladesh Securities and Exchange Commission (BSEC) seeking approval for issuing perpetual bonds worth Tk1,000 crore.
The private sector lender, which is listed on the capital market, said the withdrawal is required for the time being since another application is under process for submission with the securities regulator to issue a non-convertible subordinated bond of Tk500 crore.
Perpetual bonds are debt instruments without tenure and the proceeds strengthen a bank's additional Tier-I capital required to comply with Basel-III.
Investors can not surrender perpetual bonds themselves, while the issuer may recall its bonds with regulatory approval following allowable contexts.
On the other hand, subordinated bonds have tenures after which investors get their money back. Subordinated bond proceeds strengthen a bank's Tier-II capital base.
IFIC Bank, securing approval for two of its previous subordinated bonds, is now going to apply for its third subordinated bond.
The lender's long-term credit rating is "AA", which is "ST-2" for the short term.
The credit rating reflects a company's financial strength to pay back its debts.