The Bangladesh Securities and Exchange Commission on Tuesday allowed two companies — Investment Corporation of Bangladesh and Al-Arafah Islami Bank Limited — to float subordinated bonds worth Tk 2,500 crore in total.
The capital market regulator gave the approval in a commission meeting presided over by its chairman M Khairul Hossain.
As per the BSEC approval, ICB will float non-convertible fixed rate subordinate bond worth Tk 2,000 crore and Al-Arafah Islami Bank will issue non-convertible floating rate subordinated bond worth Tk 500 crore.
The face value of each unit of Al-Arafah Islami Bank’s bonds will be Tk 5 lakh, while the face value of ICB’s bonds will be Tk 1 crore each.
Both of the bonds will be fully redeemable in seven years.
Only corporate bodies, financial institutions, eligible investors and funds will be allowed to subscribe the bonds through private placement.
Al-Arafah Islami Bank will fulfil the requirement for Tier II capital base by raising capital through the bond issue while ICB will use the fund in primary and secondary market as a market maker, to invest in trust sector of the government and PPP projects.
Green Delta Insurance is the trustee and Prime Bank Investment Limited is the mandated lead arranger of the Al-Arafah Bank’s bond while ICB capital management Limited is the trustee and Alfa Capital Management and Roots Investment is the mandated lead arranger of the ICB’s bond.
The BSEC at the meeting also approved prospectus of an open-ended mutual fund — EDGE Bangladesh Mutual Fund — with an initial target size of Tk 10 crore.
Of the target size, sponsor-directors will provide Tk 1 crore, while the rest Tk 9 crore will be collected from general investors by selling its units.
Sandhani Life Insurance Company acts as trustee of the fund, EDGE Asset Management Company Limited as its asset management company and BRAC Bank acts as custodian of the fund.
The BSEC at the meeting fined Saad Securities Limited Tk 5 lakh as the brokerage house was found providing margin loans to buy shares of ‘Z’ category companies.
The commission also warned Salta Capital Limited as the brokerage house provided adjustment facilities to the clients for buying shares of the ‘Z’ category companies.
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