City Bank's Tk1,200cr bond approved; Jamuna, Trust Bank get extensions

The securities regulator has approved City Bank's Tk1,200 crore seven-year subordinated bond and extended the issuance deadlines for bonds of Jamuna Bank and Trust Bank.

The Bangladesh Securities and Exchange Commission (BSEC) approved the bond at its meeting today (7 April), allowing City Bank to raise the funds through a subordinated instrument.

The unsecured, non-convertible, fully paid-up, coupon-bearing bond will have a tenure of seven years and be issued through private placement to institutional investors, banks, corporate entities, mutual funds and eligible individual investors.

The coupon rate will be determined based on a reference rate – the average of the upper limit of six-month fixed deposit rates of private conventional banks. Shariah-based banks, foreign banks and banks licensed from 2012 onwards will be excluded from the calculation, with a fixed margin of 3% added to determine the final rate.

Each unit of the bond will have a face value of Tk10 lakh, making it a high-value instrument primarily targeted at institutional and large-scale investors.

Proceeds from the bond will be used to strengthen City Bank's lending capacity across corporate, retail and SME segments, supporting credit growth and improving its asset base.

Under the structure, EBL Investments will act as trustee to ensure compliance and protect investors' interests. City Bank Capital Resources and IDLC Investments have been appointed as arrangers for structuring, placement and execution. The bond will also be listed on the Alternative Trading Board to facilitate secondary market trading.

In the same meeting, the commission approved a final extension for Jamuna Bank PLC's Tk800 crore unsecured, non-convertible, fully redeemable floating-rate subordinated bond. The issuance validity has been extended until 30 September 2026, with all other terms unchanged.

Similarly, Trust Bank PLC's Tk500 crore unsecured, non-convertible, redeemable floating-rate subordinated bond VIII received a final extension until 30 September 2026, without any changes to its existing conditions.

Market participants say subordinated bonds have become an important funding tool for banks, helping strengthen their capital base while supporting long-term lending growth in the economy