IFIC Bank to raise Tk 10b through perpetual bond

FE Online Report | Sunday, 20 June 2021

The board of directors of IFIC Bank has decided to raise Tk 10 billion through issuance of perpetual bonds to boost the capital base of the bank.

The bank will issue the bond for raising funds as additional Tier-1 capital, to support the bank’s BASEL-III norms complying with Bangladesh Bank (BB) guidelines on risk based capital adequacy, said the bank in a filing with the Dhaka Stock Exchange (DSE) on Sunday.

A perpetual bond is a fixed income security with no maturity date and is often considered as a type of equity rather than debt. These types of bonds are not redeemable but instead provide a never-ending stream of interest payments.

The bond will be issued through private placement basis for Tk 9.0 billion and on public offer basis for Tk 1.0 billion in line with the latest directives of Bangladesh Securities and Exchange Commission issued on 23 May, 2021.

According to the BSEC’s latest directive, if an issuer intends to raise debt capital through issuance of perpetual bond, it shall make public offer at least 10 per cent of its intended offer.

The stock market regulator’s directive also include that perpetual bonds which will be issued by the banks must be listed on the bourses through the direct listing method.

Previously, the perpetual bonds were issued through only private placement and they were not tradable at the stock market.

The bond issue is subject to approval of the shareholders of the bank, concerned regulatory authorities – Bangladesh Bank and stock market regulator and took the final decisions after holding an extraordinary general meeting (EGM), said the filling.

The EGM will be held on August 26 at 11:00am using the digital platform. The record date for EGM is set on July 13.

Each share of the bank, which was listed on the DSE in 1986, closed at Tk 11.80 on Thursday last.

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