Five banks to raise Tk3,500cr for capital, green financing
The approvals were given at the commission’s meeting on Tuesday (29 September) for One Bank, Southeast Bank, BRAC Bank, Al-Arafah Islami Bank and Bank Asia.
The Bangladesh Securities and Exchange Commission has approved bond proposals worth a combined Tk3,500 crore from five banks to strengthen their Tier-II capital under Basel III and finance green and sustainable projects.
The approvals were given at the commission's meeting on Tuesday (29 September) for One Bank, Southeast Bank, BRAC Bank, Al-Arafah Islami Bank and Bank Asia.
One Bank will raise Tk400 crore through an unsecured, non-convertible, fully redeemable, floating-rate subordinated bond. The bond will carry a coupon of the reference rate plus 3% and will be privately placed with institutional investors and high-net-worth individuals.
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Southeast Bank will raise Tk800 crore through a seven-year subordinated bond, also offering a coupon of the reference rate plus 3%. The proceeds will be used to strengthen its Tier-II capital.
BRAC Bank will raise the largest amount, Tk1,000 crore, through a three-year zero-coupon green bond. The potential discount rate is 8.5%, with each unit having a face value of Tk10 lakh.
The proceeds will be used to provide low-cost green financing to eligible customers. The bond will be privately placed with corporate institutions, provident and gratuity funds, high-net-worth individuals and other eligible investors.
Al-Arafah Islami Bank will raise Tk500 crore through a seven-year floating-rate subordinated bond carrying a coupon of the reference rate plus 3%. The proceeds will strengthen its Tier-II capital under Basel III.
Bank Asia will raise Tk800 crore through a seven-year sustainable subordinated bond, also carrying a coupon of the reference rate plus 3%. The proceeds will be used to strengthen Tier-II capital and finance or refinance eligible green and sustainable projects.
The bonds will be issued through private placement, meaning retail investors will not have direct access to the issuances.
One Bank and Southeast Bank bonds will be listed on the Main Board. Bank Asia's bond will also be listed on the Main Board.
Green Delta Capital will act as trustee and UCB Investment as issue manager for One Bank's bond. DBH Finance will serve as trustee for Southeast Bank, Al-Arafah Islami Bank and Bank Asia, while UCB Investment will manage the first two and Prime Bank Investment will manage Bank Asia's issue.
Prime Bank Investment will also act as trustee for BRAC Bank's green bond, with IDLC Investments as issue manager.
The approvals come as banks seek to strengthen their capital positions under Basel III. Subordinated bonds allow banks to raise long-term Tier-II capital without issuing new equity, while green and sustainable bonds channel funds into eligible environmental and socially beneficial projects.
