Eastern Bank Limited (EBL) and Summit Group have fixed an Interest Rate SWAP derivative deal worth $71.25 million for two power plant projects.
They power plants are Barisal Power Limited and Summit Narayangong Power Unit II Limited.
The deal was struck at a ceremony held at EBL head office in Dhaka’s Gulshan area on Monday.
Managing Director and CEO of EBL Ali Reza Iftekhar, the bank’s Additional Managing Director Hassan O Rashid and Deputy Managing Director Ahmed Shaheen, were present on the occasion.
Director of Summit Corporation Limited Azeeza Aziz Khan, Managing Director of Summit Power Limited Lt. General (retd) Abdul Wadud, Executive Director of Summit Corporation Limited Syed AK Rahat Jaman, also attended the function.
Speaking on the occasion, Mr Ali Reza Iftekhar said this Interest Rate SWAP deal between EBL and Summit Group is first of its kind executed by a private commercial bank in Bangladesh.
Interest Rate SWAP works as insurance to protect the buyer from adverse price movement. Interest Rate SWAP enables companies to arrest long term financing cost against market volatility, the CEO of said.
This landmark deal opens up the possibility for EBL to provide hedging facility to Bangladeshi enterprise to manage their price risk, said Iftekhar.
Interest rate SWAP is becoming increasingly popular among all major global producers and traders on back of growing volatility in the market, he added.
This transaction is first of its kind executed by a private commercial bank in Bangladesh.