Dutch-Bangla Bank Ltd (DBBL), Brac Bank Ltd and One Bank Ltd have got permission from the Bangladesh Securities and Exchange Commission (BSEC) to issue bonds worth Tk 1,600 crore collectively.
The three private commercial lenders shared the information in separate filings on the Dhaka Stock Exchange yesterday.
The BSEC approved a proposal of DBBL for the issuance of fully redeemable, non-convertible, unsecured floating rate subordinated bonds of Tk 500 crore.
The face value will be Tk 1 crore each.
The purpose of the bond issuance is to increase the Tier 2 capital to meet capital requirements under Basel III and strengthen the regulatory capital base of the bank, it said.
The banks that will issue bonds are Dutch-Bangla Bank Ltd, Brac Bank Ltd and One Bank Ltd
Subordinated debt is an unsecured loan or bond that ranks below other, more senior loans or securities with respect to claims on assets or earnings. Non‐convertibility means the debt instrument can’t be converted into equity.
Brac Bank got the nod to issue a similar category bond worth Tk 700 crore. It will be issued for seven years through private placement to enhance the Tier II capital base.
One Bank has secured the consent also to issue fully redeemable, non-convertible, unsecured floating rate subordinated bonds worth Tk 400 crore. It will be issued under private placement with a tenure of seven years
The proceeds will be used to increase the tier-II capital and expand its investment and loan portfolio, the bank said.
Shares of Brac Bank, DBBL and One Bank closed unchanged at Tk 35.80, Tk 59.10 and Tk 9.50 on the DSE yesterday.
Source: The Daily Star