Brac to issue Tk 1,350 crore bond

Microcredit provider Brac has got approval to issue zero-coupon bonds worth Tk1, 350 crore through private placement.

The Microcredit Regulatory Authority (MRA) gave the approval to the non-governmental organisation recently for the first time in microcredit history of Bangladesh.

MRA Executive Vice Chairman Md Fashiullah handed over the approval letter to Tushar Bhowmik, chief financial officer of Brac, at a programme on Thursday afternoon, said a press release of Brac.

Earlier on February 3, Bangladesh Securities and Exchange Commission (BSEC) also approved the issuance of this zero-coupon bonds, it said.

According to Brac, the bond is unsecured, non-convertible, and fully redeemable with its tenure from one and a half years to five years.

Institutional investors, corporates and high net worth individuals will be eligible to purchase this bond with a multiple of BDT 10 million. RSA Advisory Limited is acting as a lead arranger of this issue and MTB Capital Limited is acting as trustee to the issue, it said.

"Client's savings and bank borrowings was the main source of funds for Brac Microfinance. Now Bond issuance also comes as an alternative source of funding for the microcredit institutions," Brac CFO Tushar Bhowmik said.

He expected that the bonds would open up avenues for non-lender institutions to invest in Brac's microfinance programme.

It is a great recognition for the microfinance sector and expressed gratitude to all regulatory bodies for the cooperation along the way, he added.

The bonds will help improve the livelihoods of people, who need access to affordable financial solutions, especially in marginalised communities, in a more efficient way, Brac said.