Two banks to raise Tk 900cr thru bonds

Two private lenders -- Dhaka Bank and Prime Bank -- will issue bonds to raise a total of Tk 900 crore.

Of the amount, Dhaka Bank will raise Tk 600 crore by issuing subordinated bonds.

The board of directors has decided to raise the fund only through the floatation of Dhaka Bank 4th subordinated bond as part of tier-II capital of the company, said the private commercial bank in a filing on the Dhaka Stock Exchange yesterday.

"The initiative has been taken in line with Bangladesh Bank guidelines on risk-based capital adequacy subject to the approval of regulatory authorities."

Prime Bank Ltd has received consent from the Bangladesh Securities and Exchange Commission to raise Tk 300 crore by issuing bonds.

The non-convertible, unsecured, fully redeemable, floating rate Prime Bank subordinated bond to be issued through private placement is aimed at enhancing the tier-II capital base, the private commercial lender said in a post on the Dhaka Stock Exchange yesterday.

Tier 2 is designated as the second or supplementary layer of a bank's capital and is composed of items such as revaluation reserves, hybrid instruments, and subordinated term debt.