First taka bond floated on LSE

Staff Correspondent | Published: 00:00, Nov 12,2019 | Updated: 14:13, Nov 12,2019


Finance minister AHM Mustafa Kamal attends the Ring the Bell event of the London Stock Exchange on the occasion of the floating of the first taka bond on the exchange in London, UK on Monday. Prime minister’s adviser on private industry and investment Salman F Rahman, LSE CEO and International Development, LSEG director Nikhil Rathi and IFC vice-president for Asia and Pacific Nena Stoiljkovic were also present on the occasion. — New Age photo

International Finance Cooperation on Monday floated the ‘Bangla Bond’ on the London Stock Exchange to raise Tk 80 crore, equivalent to approximate $9.5 million.

This was the first Taka-denominated bond listed at the LSE, according to a press release issued by the IFC, the private sector lending arm of the World Bank.    

The fund would be used for expanding operations and distribution reach of PRAN Group, one of the leading processed food and beverage manufacturers in Bangladesh and a major private sector employer in the country, it said.

According to the IFC, the three-year bond was placed with asset managers dedicated to emerging markets, with the deal arranged by Standard Chartered Bank and Bank of America Merrill Lynch.

The interest rate of the bond, according to local news agency UNB, is 6.3 per cent annually.

Finance minister AHM Mustafa Kamal attended the enlistment ceremony, ‘The Ring The Bell’ event, at the LSE on the day in London.

He welcomed the issuance of the inaugural Bangla bond saying that the ‘Bangla Taka Bond’ was the beginning of a long journey towards the country’s destination.

The London Stock Exchange Monday welcomed the listing to its main market.

Nikhil Rathi, CEO of London Stock Exchange Plc and director of International Development, LSEG, said that the landmark bond from the IFC had paved the way for the opening of the global Bangla bond market and raised the profile of the Bangladeshi taka internationally.

IFC vice-president for Asia and Pacific Nena Stoiljkovic said that the bond, issued by triple A-rated IFC, will help provide Taka-denominated solutions for fastgrowing corporates in agri-business, manufacturing and financial services.

In a statement issued on October 12, 2015, the IFC said that it had received the approval of the Ministry of Finance for the maiden off-shore taka-linked bond programme.

The $1 billion-equivalent bond programme aims to strengthen the capital markets in Bangladesh and to increase foreign investment in the country, it said.

The IFC officials said that they would scale up the size of the bond if the ‘Bangla Bond gained popularity in the European market.

They said that the IFC had issued local currency-denominated bonds in emerging market currencies as part of its regular programme of raising funds for the private sector and domestic capital markets development.

Since the inception of the local currency lending programme in the early 2000s, the IFC has extended more than $16 billion in financing to its clients globally, in more than 50 currencies, including the Indian Rupee, Chinese renminbi, Brazilian real, South African rand, Turkish lira, Kazakh tenge, Sri Lankan rupee, Cambodian riel, Myanmar kyat and Russian ruble.

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