Banglalink sells $300m bonds
Banglalink sold $300 million five-year notes—the first dollar-denominated bonds from Bangladesh—as the mobile operator plans to boost its business and refinance existing debt.
A bond is a debt instrument that enables the issuing company to raise funds by promising to repay a lender in line with terms of a contract.
Banglalink's bonds will have a re-offer price of 99.008 percent with a yield to maturity of 8.875 percent, it said in a statement. The transaction is expected to close on May 6.
“The transaction is a major milestone for Banglalink and further diversifies our sources of funding into international capital markets. We are very pleased with the support of so many high quality global investors for this inaugural offering,” Banglalink CEO Ziad Shatara said.
Banglalink, the nation's second largest mobile operator after Grameenphone, is rated B1 by Moody's and B+ by Standard & Poor's—both with a stable outlook. The bonds will be due in May 2019.
Banglalink plans to use the proceeds from the offering to repay debt and finance capital expenditures.
The 144A bond, which started marketing a week before it priced, faced some technical challenges when it came to gauging the fair value of the offering due to the fact that there were limited direct comparables and few high-yield telecom companies in Asia, reports FinanceAsia.
The bond issuance comes amid Banglalink's expansionary phase, when Russian parent company VimpelCom plans to invest around $350 million during the next two years to build the 3G network of the local mobile operator. VimpelCom is a joint venture between Norwegian telecom giant Telenor and Russian banking group Alfa.
Banglalink, which purchased 5 megahertz of spectrum last year at $21 million to offload 3G services, has 2.93 crore subscribers till March, according to Bangladesh Telecommunication Regulatory Commission.