City Bank gets nod to issue Tk 700cr bond

The Bangladesh Securities and Exchange Commission (BSEC) yesterday gave a go-ahead to The City Bank Ltd to raise Tk 700 crore through issuance of bond in order to enable the bank to strengthen its capital base, according to a statement.

With an 8-year maturity period, the subordinated bond is non-convertible, unsecured and fully redeemable floating rate debt instrument.

The City Bank will raise the fund through private placement among institutional investors and high net-worth individuals. The bank will issue the bond to strengthen its Tier-II capital base, said the BSEC in a press release.

The Tier-II capital is the second layer of capital that a bank must keep as part of its required reserves. It is comprised of revaluation reserves, general provisions, subordinated term debt, and hybrid capital instruments, according to Investopedia.

The face value of each unit of the bond is Tk 1 crore. IDLC Investments Ltd and City Bank Capital Resources Ltd are acting as trustee and arranger respectively for the bond.