City Bank has recently completed issuance of its Basel-III compliant, Additional Tier-I, Contingent-Convertible Perpetual Bond of Tk 400 crore.
The bank held a subscription closing ceremony at The Westin Dhaka in the capital on Tuesday.
Prime minister’s private industry and investment affairs adviser Salman F Rahman delivered a video speech at the event.
Bangladesh Securities and Exchange Commission chairman Shibli Rubayat Ul Islam, Bangladesh Bank deputy governor Ahmed Jamal, City Bank chairman Aziz Al Kaiser and City Bank Capital Resources Limited chairman Aziz Al Mahmood were present at the event as special guests.
The bank entered into partnerships with several institutions for issuing the floating-rate perpetual bond.
City Bank Capital Resources Ltd was the mandated arranger to the issue.
The issue has enhanced the Tier-I capital of City Bank in line with the Bangladesh Bank’s Guideline for Risk Based Capital Adequacy and increased the issuer’s total Capital Adequacy Ratio.
Salman F Rahman said that the subscription completion and Tier-1 fund raising by using a perpetual bond was a landmark event and it would help to meet capital adequacy requirements.
As enlistment of funds has been made mandatory by the Bangladesh Securities and Exchange Commission, it would make the bond very attractive to investors.
The return rate of above 9 per cent would make the bond more lucrative, Salman said.
BSEC chairman Shibli Rubayat Ul Islam said that the launching of new innovate financial products had become much vital, without which, it would not be possible to finance economic activities in the coming days.
To this end, he has been working to develop the bond market, the BSEC chair said.
He also stressed the importance of proper utilisation of the country’s foreign exchange reserve.
City Bank managing director and CEO Mashrur Arefin also spoke at the closing ceremony attended by many senior officials from the financial industry.
This bond will pave way for recapitalisation of banks through optimising their capital structure via a more efficient mix of debt and equity, said officials of the bank.
This is an effective alternative for raising capital from existing shareholders, they added.
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