The issuance of the country's first municipal bond still hangs in balance even though two key government agencies issued clearance in this regard nine months ago.
Dhaka North City Corporation (DNCC) earlier took an initiative of constructing a multi-purpose complex at Gulshan-2 raising fund through the issuance of the maiden municipal bond.
Talking to the FE, the officials of the Bangladesh Securities and Exchange Commission and the DNCC said the update of issuing the bond is yet to be satisfactory over the delay of getting architect's design for the DNCC's multi-purpose complex.
Shaikh Shamsuddin Ahmed, a BSEC commissioner, said they are waiting to facilitate the issuance of the country's first municipal bond.
"But the process cannot be accelerated unless the cost of construction is defined on receipt of the design of the complex," said Mr Ahmed.
A municipal bond is a debt security issued by a state, municipality or county to finance its capital expenditures, including the construction of multi-purpose complexes, highways, bridges or schools.
The ministry of finance (MoF) and the Local Government Engineering Department (LGED) in November last issued their clearance in favour of the issuance of the municipal bond.
The BSEC commissioner Ahmed said the officials of the UN Capital Development Fund (UNCDF) have also showed interest to provide technical assistance for the project to be implemented through municipal bond.
"The DNCC authority should be prompt in completing the relevant processes including the architect's design for the complex," said the BSEC commissioner, adding that the cost of construction and valuation of the bond will depend on the design.
Asked, the DNCC mayor Md. Atiqul Islam has also acknowledged that the process of issuing the municipal bond is being delayed as they have not yet received the design of the complex to be constructed at Gulshan-2 where the kitchen market is situated.
"We want to accelerate the process of issuing municipal bond. But the process is being delayed as the Institute of Architects Bangladesh (IAB) has not yet provided us with the design of the complex," the mayor said.
He said the DNCC is eagerly waiting for issuing the country's first municipal bond despite the concept is new for them.
"We will not be able to prepare prospectus of the bond unless we get the design. That's why we are insisting the IAB to give us the design."
The DNCC mayor, however, said the IAB is likely to give a presentation on the design on next Thursday.
"Our next target is to construct another multipurpose complex at Karwan Bazar through issuance of municipal bond," said the DNCC mayor Mr Islam.
The IAB's president could not be reached for his comment on the update of the design for the DNCC's multi-purpose complex.
As part of the move of diversifying the country's bond market, the government recently has raised Tk 80 billion issuing the first sukuk bond namely Bangladesh Government Investment Sukuk (BGIS).
The fund will be utilised for the implementation of a safe water supply project titled 'Safe Water Supply for the Whole Country'.
In private sector, the board of the directors of the Beximco recently has also taken a decision of issuing asset backed bond namely Islamic Shariah compliant Sukuk Al Istisna worth Tk 30 billion for the purpose of business expansion.
The securities regulator has already allowed 11 banks including The City Bank, Mutual Trust Bank, Trust Bank, Jamuna Bank and One Bank to issue perpetual bond.
The BSEC has issued a directive regarding listing of perpetual bonds as part of the move of increasing liquidity and encouraging investors to invest in the bonds.
The officials of the securities regulator said investors will not be encouraged to invest in bonds unless they are offered with the scope of exit through trading on the bourses.