The board of directors of Pubali Bank has now decided to issue Perpetual Bond worth Tk 5.0 billion in a revised manner in order to comply with the securities regulator’s latest directive.
As per the revised manner, the bank will raise Tk 4.50 billion (90 per cent) through private placement and Tk 500 million (10 per cent) through public offer instead of 100 per cent private placement as previously decided, according to a filing with the Dhaka Stock Exchange (DSE) on Thursday.
Referring to the earlier news published on March 4, 2021, the board of the bank said they revised the bond issue manner to comply with Bangladesh Securities and Exchange Commission (Debt Securities) Rules, 2021 and Directive issued on May 23, 2021.
According to the BSEC directive, if an issuer intends to raise debt capital through the issuance of perpetual bond, it shall make a public offer for at least 10 per cent of its intended offer.
The stock market regulator’s 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 only through private placement and they were not tradable at the stock market.
Perpetual bonds are fixed-income securities with no maturity date and investors receive interest in the form of coupon payments.
The bank will issue the perpetual bond for raising funds as part of the additional Tier-I (AT-1) capital to support the bank’s Basel III compliance in line with Bangladesh Bank guidelines on risk-based capital adequacy dated December 2014, according to the filing.
The bond issue is subject to approval from concerned regulatory authorities -- Bangladesh Bank, BSEC as well as complying with regulatory requirements.
Each share of the bank, listed on the DSE in 1984, closed at Tk 24.10 on Wednesday. Its shares traded between Tk 20.50 and Tk 27.10 last year.
The bank’s first-quarter (Q1) consolidated earnings per share (EPS) rose to 0.98 for January-March, 2021 which was Tk 0.86 for the same quarter of the previous year.
The bank disbursed 12.50 per cent cash dividend for the year ended on December 31, 2020. In 2019, it had provided a 10 per cent cash dividend.
The bank’s paid-up capital is Tk 10.28 billion, authorised capital is Tk 20 billion and the total number of securities is 1.02 billion.
The sponsor-directors own 31.49 per cent stakes in the bank while the institutional investors own 27.15 per cent, foreign investors 0.40 per cent and the general public 40.96 per cent as of May 31, 2021, the DSE data show.