PRAN Agro Limited (PAL), one of the country's leading agro processors, has issued a non-convertible international bond worth Tk 2.1 billion which is first of its kind in Bangladesh.
The company has successfully achieved financial close of a landmark Tk 2.1 billion (US$ 25 million) non-convertible and redeemable bond, with 100 per cent on-demand credit guarantee from GuarantCo and fully subscribed by MetLife Bangladesh as of May 19, 2021, said a press release.
The 7-year fixed coupon bond is the first-ever instrument of its kind in Bangladesh and is expected to play a transformational role in supporting alternate source of infrastructure financing in Bangladesh, it added.
PAL, a member of PRAN-RFL Group, is one of the largest food processors with 0.1 million registered contract farmers and 0.11 million employees.
The bond proceeds will be used to develop critical infrastructure in the agricultural supply chain and support PAL's expansion plans in the local and export markets.
The bond is backed by an on-demand guarantee by GuarantCo, part of the Private Infrastructure Development Group (PIDG), and funded by the governments of the United Kingdom, Switzerland, Australia and Sweden, through the PIDG Trust, the Netherlands, through FMO and the PIDG Trust, France through a stand-by facility and Global Affairs Canada through a repayable facility.
GuarantCo is rated AA- by Fitch and A1 by Moody's, said the release.
Green Delta Company Ltd acted as the bond trustee and security agent to the issue.
River stone Capital Limited, an independent merchant bank based in Bangladesh, acted as a financial advisor to PAL and arranger to the issue.
The PAL said it is the first blended finance structured bond of its kind guaranteed by international agency like GuarantCo.
While it is the first to be subscribed by an international insurance company as well as the country's first directly issued digitised bond under Private Placement of Debt Securities Rules, it said.
According to media reports, the Bangladesh Securities and Exchange Commission (BSEC) allowed two companies including PAL to float non-convertible floating rate 'Mudaraba' subordinate bond worth Tk 2.1 billion in September, 2020.
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