Opening of the subscription for two perpetual bonds tomorrow

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| Update:
Nov. 20, 2021, 10:21 a.m.


Two new mudaraba perpetual bonds – IBBL 2nd Mudaraba Perpetual Bond and SJIBL Mudaraba Perpetual Bond – will be open for public subscription tomorrow (Sunday).

Subscription through the electronic exchange subscription system will continue until December 2, according to the Dhaka Stock Exchange (DSE).

Islami Bank Bangladesh Limited (IBBL) issued “IBBL 2nd Mudaraba Perpetual Bond” to raise Tk 8.0 billion while Shahjalal Islami Bank Limited issued “SJIBL Mudaraba Perpetual Bond” to raise Tk 5.0 billion .

A perpetual bond is a fixed income security with no maturity date and is often viewed as a type of stock rather than debt. These types of bonds are non-redeemable but instead provide an endless stream of interest payments.

The minimum subscription amount is 5,000 Tk and there is no maximum limit for the two bonds.

Islami Bank: Bangladesh Securities and Exchange Commission (BSEC) on September 5 granted its agreement to Islami Bank to raise a total of Tk 8.0 billion through the IBBL 2nd Mudaraba Perpetual Bond as additional Tier I capital form the bank.

The bond will be subordinated, contingent-convertible, fully paid, variable rate, coupon / discretionary profit, not cumulative.

Of the Tk 8.0 billion, Tk 7.20 billion will be raised through a private placement and the remaining Tk 800 million through public offerings in accordance with BSEC public offer rules.

Islami Bank, the listed private commercial bank, will strengthen its additional Tier 1 capital base with the money raised.

Local institutional investors such as non-bank financial institutions, insurers, banks, asset management companies and high net worth individuals can purchase the bond units through a private placement.

SBL Capital Management acts as bond trustee, while Prime Bank Investment and UCB Investment act as issue manager.

Each share of Islami Bank Bangladesh, listed on the DSE in 1985, closed Thursday at Tk 32.70. Its shares have traded between Tk 25.40 and Tk 33.70 in the past year.

Shahjalal Bank: On September 5 this year, the stock market regulator agreed to Shahjalal Bank to raise a total of Tk 5.0 billion through SJIBL Mudaraba Perpetual Bond as additional Tire-1 capital of the bank.

Of the Tk 5.0 billion, Tk 4.50 billion will be raised through a private placement and the remaining Tk 500 million through a public offering in accordance with BSEC’s public offering rules .

The objective of the issue is to strengthen the bank’s own funds.

The coupon rate of the bond will be 6.0% to 10% of the bond.

Local institutional investors such as non-bank financial institutions, insurers, banks, asset management companies and high net worth individuals can purchase the bond units through a private placement.

MTB Capital Ltd acts as the bond trustee, while two other investment banks – Islami Bank Capital Management and UCB Investment – work as the issue manager.

Each share of Shahjalal Islami Bank, listed on the DSE in 2007, closed Thursday at Tk 22.80. Its shares have traded between Tk 19.40 and Tk 23.90 in the past year.

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