City Bank Perpetual Bond's half-yearly coupon rate set at 10%
The coupon period starts from 1 March 2023, and ends on 31 August
The City Bank Limited has announced a 10% half-yearly coupon rate for its perpetual bond which is trading at the Dhaka Stock Exchange (DSE) from June 2022.
According to a DSE disclosure on Thursday, the coupon period starts from 1 March 2023, and ends on 31 August.
A coupon is the interest payment received by a bondholder from the date of issuance until the date of maturity of the bond.
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A perpetual bond is a hybrid security with no maturity date, and has both debt and equity characteristics. These types of bonds are not redeemable. Instead, they provide a never-ending stream of interest payments.
The City Bank Perpetual Bond, which made its trading debut with a price of Tk10 lakh per unit, closed at Tk10.37 lakh per unit on Thursday.
The bond is unsecured, contingent-convertible, fully paid-up, non-cumulative and Basel-III compliant.
The City Bank, a publicly listed private commercial bank, initiated the issuance process of the bond in 2019. It was a first-of-its-kind instrument that was never seen in the country before.
With approvals from the Bangladesh Bank and the Bangladesh Securities and Exchange Commission in August 2020 and December 2020 respectively, the bank completed a successful subscription of Tk400 crore for the bond in March 2021 through private placements.
IDLC Investments Limited is the bond's trustee while City Bank Capital Resources Limited is the arranger of the bond.
Out of total units of the bond, institutional investors have 65% and the general shareholders hold the remaining.
