BSEC okays Tk 3,500cr bonds for five banks

The Bangladesh Securities and Exchange Commission has approved bond proposals worth a combined Tk 3,500 crore for five commercial banks to help strengthen their capital base and support green and sustainable financing.

The approvals were given at the commission’s 1031st meeting on Tuesday, chaired by BSEC Chairman Masud Khan at its Agargaon office.

One Bank PLC received approval to issue a Tk 400 crore unsecured, non-convertible, fully redeemable, floating-rate subordinated bond. The bond will carry a coupon rate of the reference rate plus 3% and will be issued through private placement to institutional and high-net-worth investors.

Southeast Bank PLC was allowed to raise Tk 800 crore through a seven-year, unsecured, non-convertible and fully redeemable floating-rate subordinated bond. Its coupon rate will also be the reference rate plus 3%.

BRAC Bank PLC secured approval for a Tk 1,000 crore, three-year, unsecured, non-convertible and fully redeemable zero-coupon green bond, with an indicative discount rate of 8.5%.

The proceeds from BRAC Bank’s bond will be used to provide low-cost green financing to eligible clients.

Al-Arafah Islami Bank PLC received approval for a Tk 500 crore, seven-year, unsecured, non-convertible and redeemable floating-rate subordinated bond, carrying a coupon of the reference rate plus 3%.

Bank Asia PLC was also cleared to issue a Tk 800 crore, seven-year, unsecured, non-convertible, fully redeemable floating-rate sustainable subordinated bond.

The proceeds from Bank Asia’s bond will be used both to strengthen its Tier-II capital and to finance or refinance eligible green and sustainable projects.

BSEC said the proceeds from the bonds issued by One Bank, Southeast Bank, Al-Arafah Islami Bank and Bank Asia would strengthen their Tier-II capital base in line with Basel III requirements.

The bonds of One Bank, Southeast Bank, BRAC Bank and Bank Asia will also be required to be listed on the Main Board of the stock exchanges.