GP ready to enter bond market

Grameenphone has finalised its plan to raise Tk425crore ($60million) through private placement in the local bond market by next month, aiming to secure a healthy balance sheet before its debut in the capital market.
“We are going ahead with the launching of the bonds, sometime in November," said Md Arif Al Islam, chief financial officer of the company, yesterday.
He said, “We are thinking of raising around $40 to $60million from the bond market, depending on market appetite. However, the issue will not be a retail bond. The bonds will be privately placed, such as with banks, financial institutions and insurance companies.”
A bond is a debt instrument, in which the issuer owes the holder a debt and is obliged to repay the principal and interest at maturity.
According to the official, the value of the two-year tenure bond will be a minimum of Tk10 crore each and the coupon rate will not be less than 14.50 percent.
Does capital crisis encourage Grameenphone to go to the bond market? Islam said the vision is different for Grameenphone.
"It is part of our strategy to have a health balance sheet before entering the capital market. So far we have heavy equity and minor debt. So, we intend to have a balance between equity and debt," he said. “According to me, a healthy balance sheet means a good mix of equity and debt”.
Arif claimed that Grameenphone is getting good response from the market as it is a triple A rated company, although presently all investors are a little bit hesitant in the market.
Earlier, in August, the capital market regulator approved GP's proposal to raise funds from the bond market.