First Security Islami Bank to issue perpetual bond

The securities regulator has allowed First Security Islami Bank to issue a Mudaraba perpetual bond worth Tk600 crore to strengthen the capital base of the private lender.

The Bangladesh Securities and Exchange Commission (BSEC) gave the approval on Wednesday.

Bond investors' return would be measured based on the floating rate.

Government financial institutions, mutual funds, banks, insurance companies, organisations, and trusts, corporations, and local institutional investors will be able to buy the bond units through a private placement.

The unit price of the bond will be Tk10 lakh.

Green Delta Insurance Company will act as the trustee of the bond while City Bank Capital Resources is mandated as its lead arranger.

Banks in Bangladesh are opting for perpetual bonds this year to fulfill their Tier-1 capital requirement.

They had come through a decade with the issuance of tenured subordinated bonds for strengthening Tier-2 capital base, as required by the standard.

The banks have a deadline to comply with Tier-1 strengthening regulations.

First Security Islami Bank was listed in the capital market in 2008.

In the first nine months of this year, the bank posted its consolidated earnings per share of Tk1.33, which was Tk1.18 in the same period of the previous year.

The last trading price of the company at the Dhaka Stock Exchange was Tk9.20.