The stock market regulator has given approval to issue perpetual bonds worth Tk 14 billion in favour of three listed bank - First Security Islami Bank, Trust Bank and City Bank - to strengthen their additional Tier-1 capital base.
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.
The perpetual bonds will be unsecured and feature a floating rate. The price per unit of each bond is Tk 1.0 million.
As per the regulatory approval, First Security Islami Bank will issue perpetual bond of Tk 6.0 billion while Trust Bank and City Bank to issue bonds worth Tk 4.0 billion each.
The approvals came in the last meeting held on Wednesday at the office of Bangladesh Securities and Exchange Commission (BSEC) presided over its chairman Prof. Shibli Rubayat Ul Islam.
First Security Islami Bank: First Security Islami Bank will issue unsecured, contingent-convertible, floating rate, mudaraba perpetual bond worth Tk 6.0 billion.
The purpose of the bond issue is to strengthen the additional Tier-1 capital base of the bank.
The price per unit of the bond is Tk 1.0 million and the coupon rate is 6.0 per cent to 10 per cent.
The fund will be raised from government financial institutions, mutual funds, listed banks, insurance companies, regional rural banks, private organisations, trust funds and eligible investors though private placement. The price per unit of each bond is Tk 1.0 million.
Green Delta Insurance Company Ltd will act as the Trustee and City Bank Capital Resources arranger for the Bond.
City Bank: The securities regulator has given approval to issue the bond with update features and BSEC has given consent under the provisions of the Securities and Exchange Commission (Private Placement of Debt Securities) Rules, 2012.
The perpetual bond will be unsecured and feature a floating rate perpetual bond worth Tk 4.0 billion, the bank said in a statement on Thursday.
The consent has been accorded subject to the condition that the company shall comply with the relevant laws and regulatory requirements and shall also adhere to the conditions imposed by BSEC under Section 2CC of the Securities and Exchange Ordinance- 1969.
Trust Bank: The Trust Bank has informed that that BSEC has accorded consent under the provisions of the Securities and Exchange Commission (Private Placement of Debt Securities) Rules, 2012, for raising of capital of the company amounting to Tk 4.0 billion by issuing of unsecured, contingent-convertible, floating rate perpetual bond through private placement in cash consideration.
The consent has been accorded subject to the condition that the bank shall comply with the relevant laws and regulatory requirements, and shall also adhere to the conditions imposed by BSEC under Section 2CC of the Securities and Exchange Ordinance, 1969, according to a statement.
