Trading of Dhaka Bank Perpetual Bonds will commence on the stock exchanges on February 5 under the settlement category 'N' as an eighth listed perpetual bonds.
The Dhaka Stock Exchange trading code for the bond is "DBLPBOND" and company code is 26012, according to a disclosure posted on the DSE Thursday.
Perpetual bonds are fixed income securities with no maturity date and they are often considered a type of equity rather than debt. These types of bonds are not redeemable. Instead, they provide a never-ending stream of interest payments.
Currently, seven perpetual bonds are listed in the stock market.
The Bangladesh Securities and Exchange Commission (BSEC) on October 6 last year accorded its consent to Dhaka Bank to raise Tk 2.0 billion through the issuance of perpetual bonds to strengthen the capital base of the lender.
The bank raised Tk 1.80 billion from listed banks, insurance companies, regional rural banks, private organisations, trust funds and eligible investors through the private placement while Tk 200 million through public issue as per the regulatory approval.
In a directive issued in May 2021, the securities regulator included a provision for the subscription of 10 per cent of a perpetual bond through public offer.
Dhaka Bank raised the said amount to meet additional Tier-I capital to support the bank's Basel III compliance in line with the Bangladesh Bank guidelines on risk based capital adequacy.
The bond is an unsecured, contingent-convertible and floating rate perpetual bond. The coupon rate will be 6 per cent (floor) to 10 per cent (ceiling), as per the regulatory approval.
According to the BSEC (Debt Securities) Rules, 2021 and the directive issued in May 2021, if an issuer intends to raise debt capital through issuance of perpetual bonds, it shall make a public offer for at least 10 per cent of its intended offer and must be listed on the bourses.
Previously, the perpetual bonds were issued only through private placement and they were not tradable at the stock market.
Listed in 2000, Dhaka Bank's share closed at Tk 13.30 on Thursday, gaining 0.76 per cent over the previous day.
The bank has reported consolidated earnings per share (EPS) of Tk 0.70 for July-September, 2022, up from Tk. 0.56 for July-September 2021.
IDLC Investments is the trustee of the bond while UCB Investment is the issue manager, underwriter and arranger.