BRAC Bank issues Tk 700 crore bond targeting small investors

Time Digital Report: BRAC Bank has launched a subordinated bond worth Tk 700 crore to enhance its Tier II Capital base and it is now available for subscription by investors.

The bond will support the bank's capital adequacy requirements as it has earned significant balance sheet growth in recent years.

Any individual or institution can invest in the bond with a minimum investment threshold of Tk 10 lakh.

This seven-year tenor non-convertible, unsecured, fully redeemable, coupon-bearing, floating rate-based bond has already been approved by the Bangladesh Securities and Exchange Commission and Bangladesh Bank.

The coupon interest rate on the bond has been fixed as "Reference rate (Industry average of highest FDR rates) + 3 per cent margin".

The coupon rate will be reset half yearly based on the latest reference rate.

As of December 2023, the coupon rate comes to 10.97 per cent.

The repayment of the principal amount will start from the third year which will cover 20 pe ent each year and the subscribers will be entitled to receive their coupon interest half-yearly.

Commenting on the investment scope of the bond, BRAC Bank Managing Director and CEO Selim RF Hopportunities the minimum ticket size has been kept low to create investment opportunities for aa , particularly for small investors and micthe avers.

"We are offeIndiaa 3 per cent higher interest rate on bosubscribererage FDR rate in the industry that will be exciting to the subscribers," he added.