City Bank has completed the issuance of the country’s first-ever contingent-convertible perpetual bond of Tk 4.0 billion (Tk 400 crore).
The bank held a subscription closing ceremony at a city hotel in this regard recently, says a press release.
Salman F Rahman, investment adviser to Prime Minister Sheikh Hasina, delivered a video speech in the programme to mark the completion of perpetual bond issuance.
Mr Rahman said the subscription completion and Tier-1 fundraising by using a perpetual bond is a landmark event and it would help to meet capital adequacy requirements.
Professor Shibli Rubayat Ul Islam, chairman of Bangladesh Securities and Exchange Commission (BSEC), was present as the special guest in the programme.
Ahmed Jamal, deputy governor of Bangladesh Bank, Aziz Al Kaiser, chairman of City Bank, and Aziz Al Mahmood, chairman of City Bank Capital Resources Limited, among others, were present at the event.
BSEC chairman said the launching of new innovative financial products has become vital. It won't be possible to finance economic activities without it.
The bank partnered with several institutions to issue the floating-rate perpetual bond. City Bank Capital Resources Ltd was the mandated arranger of the issue.
The issue enhanced the Tier-I capital of City Bank following the ‘Guideline of Risk Based Capital Adequacy’ of Bangladesh Bank, and thus increased the issuer’s total Capital Adequacy Ratio (CAR).
Managing Director and CEO of City Bank Mashrur Arefin expressed sincere gratitude to the subscribers, regulators and all others involved in the issuance process.
Contingent-Convertible Perpetual Bond bond will pave way for the recapitalisation of banks through optimising their capital structure via a more efficient mix of debt and equity.
This is an effective alternative to raising capital from existing shareholders. This first-of-its-kind instrument is expected to become a critical tool to support the expansion of the banking sector, the statement adds.
