City Bank gets nod for Tk 1,200cr bond

The Bangladesh Securities and Exchange Commission
(BSEC) has approved City Bank’s subordinated bond worth Tk 1,200 crore.
In a press release yesterday, the regulator said the
unsecured, non-convertible, fully paid-up, fully redeemable, and coupon-bearing
bond had received the green light.
Subordinated debt is an unsecured loan or bond that
ranks below senior loans or securities for claims on assets or earnings,
according to Investopedia.
The bond’s coupon rate will be the reference rate plus
a 3 percent margin. The reference rate is the average of the upper limit of
six-month fixed deposits at private conventional banks, excluding shariah
banks, foreign banks, and banks licensed after 2012.
City Bank will raise funds by issuing bonds to mutual
funds, individual investors, corporates, banks, and other institutional
investors through private placement. Each bond has a face value of Tk 10 lakh.
The proceeds will be used to provide SME, corporate, and retail loans.
EBL Investments will act as the bond’s trustee, while
City Bank Capital Resources and IDLC Investments will serve as arrangers.
The BSEC said the bond will be listed on the
alternative trading board of the stock exchange.
In addition, the regulator approved the extension of
approval letters for Jamuna Bank’s Tk 800 crore bond and Trust Bank’s Tk 500
crore bond. Both bonds are non-convertible, unsecured, fully redeemable, and
carry a floating rate.
Following the banks’ applications, their tenures have
been extended until September 30, 2026.
















