UCB to issue Tk 1,000cr bond
United Commercial Bank (UCB) has decided to issue a subordinated bond worth Tk 1,000 crore for seven years in a bid to strengthen its capital base.
This is the fifth subordinated bond of the bank, said UCB in a post on the website of the Dhaka Stock Exchange (DSE) yesterday.
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.
In the case of borrower default, creditors who own subordinated debt will not be paid out until after senior bondholders are paid in full. The bond is unsecured, non-convertible, and redeemable.
The bond would be issued as a part of Tier-II Regulatory Capital, subject to the approval of regulators, UCB said in the disclosure.
"As our balance sheet is big, our capital requirement is also high," said ATM Tahmiduzzaman, company secretary of UCB.
"On the other hand, our previous subordinated bonds are mostly close to redemption. So, we are going to issue the bond."
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