The subscription period of AB Bank Perpetual Bond for general public and eligible investors through the electronic subscription system of the stock exchanges has been extended until May 22 due to poor response.
As per earlier schedule, the bank's bond subscription was held between January 30 and February 17, aiming to raise Tk 600 million.
The subscription period of the bond has been extended as per Bangladesh Securities and Exchange letter dated February 16, said the bank in a filing with the Dhaka Stock Exchange (DSE) on Sunday.
The general public, including non-resident Bangladeshis (NRBs) can apply through stockbrokers or merchant banks while the eligible investors can participate through electronic subscription system (ESS).
Minimum subscription amount is Tk 1,000 (face value) or its multiples and there is no maximum bar.
Participating eligible investors shall be required to pay full subscription amount and subscription fee is Tk 3,000 in the prescribed bank as of May 22.
A perpetual bond is a fixed income security with no maturity date and is often considered as a type of equity rather than debt. These types of bonds are not redeemable but instead provide a never-ending stream of interest payments.
Earlier on November 23, 2021, BSEC accorded its consent to AB Bank for raising Additional Tier-I (AT-l) capital through issuance of Perpetual Bonds of Tk 6.0 billion.
Of the Tk 6.0 billion, Tk 5.40 billion will be issued through private placement and the remaining Tk 600 million under the public offering, as per the BSEC approval.
According to the BSEC directive, if an issuer intends to raise debt capital through issuance of perpetual bond, it shall make a public offer for at least 10 per cent of its intended offer and must be listed on the bourses.
Previously, the perpetual bonds were issued only through private placement and they were not tradable at the stock market.
AB Bank will strengthen its additional Tier-1 capital base with the collected money, as per the BSEC approval.
The bond is transferable, unsecured, non-cumulative, contingent- convertible and floating rate perpetual bond. The coupon rate will be 6.0 per cent to 10 per cent.
Local merchant bank, MTB Capital Ltd is acting as the trustee of the bond, while Riverstone Capital Ltd is working as issue manager and arranger. BMSL Investments Ltd is working as the underwriter of the bond.
Each share of the bank, which was listed on the DSE in 1983, closed at Tk 12.80 on Sunday, losing 1.54 per cent. Its shares traded between Tk 8.70 and Tk 17.40 in the last one year.
The bank's paid-up capital is Tk 8.35 billion and authorised capital is Tk 15 billion, while the total number of securities is 835.83 million.
Meanwhile, the subscription period of Pubali Bank Perpetual Bond for general public and eligible investors has also been extended until March 1.
Earlier, the bank's bond subscription scheduled was between January 10 and January 30, aiming to raise Tk 500 million.
Minimum subscription amount is Tk 5,000 (or its multiples) and there is no maximum bar.
Earlier on December 7, 2021, the stock market regulator accorded its consent to the bank for raising additional Tier-l capital through issuance of Pubali Bank Perpetual Bond worth Tk 5.0 billion.
Tk 4.50 billion out of Tk 5.0 billion will be raised through private placements while the remaining Tk 500 million will be raised through public offer, as per the BSEC approval.
Green Delta Capital is the trustee of the bond, while City Bank Capital Resources and UCB Investment are working as arranger, issue manager and underwriter of the bond.
The bond will be unsecured, contingent-convertible, fully paid-up, non-cumulative, BASEL III compliant. The coupon rate will be 6.0 per cent to 10 per cent.
Each share of the bank, which was listed on the stock exchange in 1984, closed at Tk 28.10 on Sunday, gaining 0.35 per cent.
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