GP issues Tk 425cr bonds in private placement
Grameenphone Chief Executive Officer Anders Jensen poses for photograph after signing agreements on bonds. Photo: Grameenphone
Grameenphone (GP) has signed agreements with 10 institutions in a plan to raise Tk 425 crore from the local market through issuance of coupon bearing bonds on a private placement basis.
The country's largest mobile phone operator will issue 425 bonds with a Tk 1 crore denomination each. The bonds will be of two terms -- 540 days and 720 days, the company said in a statement yesterday.
All the bonds will carry an interest rate of 14.5 percent per annum. The bonds will be "unsecured and non-convertible" and will not be listed on any bourse. But a free transferability structure will mean the instruments can easily be bought and sold over the counter.
"Grameenphone has taken the initiative to look beyond the conventional bank loan structure and into the capital market in the form of issuing a debt instrument to meet its funding needs," it said.
Grameenphone will improve the infrastructure of the company and prepay a portion of its short-term debt with the proceeds of the bonds.
In addition to raising capital, the move will help reduce the liquidity risk and better match the asset liability maturity profile of the company.
“Grameenphone is proud to be able to contribute to a meaningful development of Bangladesh's capital market by introducing new debt instruments and creating more awareness in the domestic market,” said Anders Jensen, chief executive officer of Grameenphone.
“A placement of this kind will provide the bond market of the country a much needed boost and pave the way for other companies to explore this new avenue of financing,” he said.
The bonds are the first of a kind for Bangladesh's capital market. Grameenphone and the bonds have both been rated as “AAA” by the Credit Rating Agency of Bangladesh (CRAB), which is the highest credit rating given by CRAB.
Citibank NA Bangladesh is the arranger and placement agent for the transaction.
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