BB extends Tk8000cr Sukuk term for five years

The term for the first Bangladesh Government Investment Sukuk, valued at Tk8,000 crore, which was issued against the "Safe Water Supply Across the Country" project, has been extended by an additional five years.

Bangladesh Bank in a press release on Sunday informed this information.

The five-year Sukuk was originally set to mature on 29 December 2025. Following this new decision, the bond's next maturity date will be 29 December 2030.

The decision to extend the term was made to protect the interests of the Sukuk holders and ensure adherence to Shariah principles. The extension was based on the recommendation of the Shariah Advisory Committee, formed under Bangladesh Bank's Debt Management Department, and the approval of the government's Cash and Debt Management Committee (CDMC).

All necessary ancillary documents for the extension were approved during a meeting of the Shariah Advisory Committee held at Bangladesh Bank's Head Office yesterday.

For the extended period, the government will provide a total of Tk3,804 crore as rent for the use of the leased Sukuk assets.

While the calculated annual rental rate is set at 9.51 percent, the current effective rate stands at 4.69 percent. Investors will receive this rent proportionally on a semi-annual basis.

During the extended term, investors have the choice to either retain their Sukuk holdings or opt for encashment.

Any investor who chooses not to continue their investment beyond the original term can submit an application through their respective banks to the 'Special Purpose Vehicle'– Islamic Securities Section (Debt Management Department) of Bangladesh Bank.

These investors will be able to liquidate their Sukuk on the original maturity date of 29 December 29 2025.

Bangladesh Bank stated that detailed instructions regarding the encashment process will be communicated to the concerned parties shortly.