Exim Bank to issue Tk600cr bond
Exim Bank, officially known as Export Import Bank of Bangladesh Limited, wants to raise Tk600 crore by issuing a fifth mudaraba subordinated bond.
The proceeds will be regarded as Tier II capital of the issuer, which will help the private sector lender fulfil its Basel-III requirement.
The issuance will require approval of the Bangladesh Securities and Exchange Commission and the Bangladesh Bank, according to a stock exchange filing on Thursday.
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The bank wants to issue the bond for seven years.
Currently, subordinated bonds that are mostly issued by banks dominate the local bond market. These help lenders construct their mandatory Tier II capital base through bond proceeds within a specific tenure.
A subordinated bond is a bond that, in the event of a debtor's bankruptcy, is paid after the payment of other higher priority bonds, the so-called senior unsubordinated bonds. Subordinated bonds are unsecured and therefore riskier than older ones.
Meanwhile, Exim Bank's shares closed on the floor at Tk10.40 each on Thursday at the Dhaka Stock Exchange.
Besides, in the January-March quarter of this year, its consolidated earnings per share (EPS) were Tk0.14, which was 44% lower than a year ago.
Earlier, it had recommended a 10% cash dividend for its shareholders for last year, when it posted 72% year-on-year EPS growth.
