The board of directors of Premier Bank has decided to raise Tk 4.0 billion through the issuance of unsecured contingent-conversion floating rate perpetual bonds to boost the capital base of the bank.
The bank will issue the bond (The Premier Bank Perpetual Bond) for raising funds as additional Tier-1 capital, to support its BASEL-III norms complying with Bangladesh Bank (BB) guidelines on risk based capital adequacy, said the company in a filing with the Dhaka Stock Exchange (DSE) on Thursday.
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 3.60 billion and on public offer basis for Tk 400 million in line with the latest directive of Bangladesh Securities and Exchange Commission (BSEC) in this regard 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 a public offer at least 10 per cent of its intended offer. The directive also includes 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 Premier Bank’s bond issue is subject to the approval of the concerned regulatory authorities – Bangladesh Bank and the BSEC as well as approval of the shareholders of the bank in the extraordinary general meeting (EGM), according to the filing.
The EGM will be held on September 28 at 2:00 pm using a digital platform. The record date for EGM is set for September 1.
Each share of the bank, which was listed on the DSE in 2007, closed at Tk 13.60 on Wednesday. Its shares traded between Tk 9.90 and Tk 14.20 last year.
The bank has reported consolidated earnings per share (EPS) of Tk 1.03 for April-June 2021 as against Tk 0.39 for April-June 2020.
The bank’s six months’ consolidated EPS was Tk 1.58 for January-June 2021 as against Tk 0.90 for January-June 2020.
The bank disbursed 12.50 per cent cash and 7.50 per cent stock dividend for the year ended on December 31, 2020. In 2019, it provided 5.0 per cent cash and 5.0 per cent stock dividend.
Its paid-up capital is Tk 10.43 billion, authorised capital is Tk 15 billion and the total number of securities is 1.04 billion.
The sponsor-directors own 35.28 per cent stakes in the bank, while the institutional investors own 20.80 per cent, foreign investors 1.45 per cent and the general public 42.48 per cent as of June 30, 2021, the DSE data show.