Eleven banks will enlist perpetual bonds worth Tk 5,100 crore on the stock exchanges through direct listing as per the directive of the Bangladesh Securities and Exchange Commission.
The BSEC on Sunday issued a directive regarding the matter.
According to the directive ,‘11 banks which have already got consent from the commission for issuance of perpetual bond must apply for direct listing of their bond on the main board of the exchange(s)’.
The BSEC gave the approval to 11 banks to float perpetual bonds between June 23, 2020 and March 21 this year.
Jamuna Bank, The City Bank, One Bank and Mutual Trust Bank were allowed to float unsecured, non-convertible, floating rate perpetual bonds worth Tk 400 crore each.
Standard Bank and NCC Bank were also given approvals of the same nature to float perpetual bonds worth Tk 500 crore each.
First Securities Islami Bank, Social Islami Bank Limited and Trust Bank were given the nod to float unsecured, contingent-convertible floating rate perpetual bonds worth Tk 600 crore, 500 crore and Tk 400 crore respectively.
United Commercial Bank Limited got the approval to float unsecured, conditionalconvertible, floating rate perpetual bond worth Tk 400 crore while Exim Bank Limited was allowed to float unsecured contingent-convertible EXIM Bank Mudaraba perpetual bond worth Tk 600 crore.
‘Existing perpetual bondholders (at the time of listing) of the 11 (eleven) bank companies must sell at least 10 (ten per cent) of their holdings at market price as determined through the exchange(s), within 90 (ninety) market days of listing of such bonds and on completion of targeted sales, the selling broker must submit a detailed report to the exchange(s) within 3 working days thereof,’ the directive said.
The BSEC also made it mandatory for all companies intending to raise capital through issuing perpetual bonds to raise at least 10 per cent of the bonds through public offerings.
Market intermediaries, including merchant banks and portfolio managers, asset management companies and stock dealers, must invest at least 3 per cent of their own portfolios in the listed debt securities within June 30, 2022 and shall at all times maintain such investment ratio in the listed debt securities, the directive said.
Besides, every asset manager and trustee of mutual funds must ensure investment in the listed debt securities at least 3 per cent of portfolio value of the mutual fund within June 30, 2022, it said.
Every issuer of perpetual bond must, in each year, make at least 20 per cent provision in addition to annual interest or coupon payment of its perpetual bond, which shall be accumulated, it also said.
If there is any shortage of fund or profit for the year to make any payment of such interest or coupon, the issuer of perpetual bond must make payment of due interest in full using funds from the accumulated coupon or interest provision account, the directive said.
Midway News Team
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