Eighteen companies, including banks and non-bank financial institutions, have applied to the Bangladesh Securities Commission to raise a total of Tk 8,500 crore by issuing bonds.

The commission is evaluating applications submitted by companies, BSEC officials said.

According to the documents filed, Standard Bank will issue perpetual bonds worth Tk 500 crore, Dhaka Bank Tk 400 crore, Bank Asia Tk 500 crore, Pubali Bank Tk 500 crore, Mercantile Bank Tk 700 crore, The Premier Bank Tk 400 crore and AB Bank Tk 600 crores.

NCC Bank will issue non-convertible subordinated bond with a value of Tk 700 crore, NRB Commercial Bank will issue a contingent convertible subordinated bond with a value of Tk 500 crore, Dutch-Bangla Bank will issue a redeemable non-convertible subordinated bond with a value of of Tk 500 crore and IFIC Bank will issue non-convertible bonds – a convertible coupon subordinated bond with a value of Tk 500 crore.

In addition, City Bank has requested the issuance of subordinated bonds valued at Tk 700 crore and South East Bank will issue a perpetual bond in the amount of Tk 700 crore.

Banks and NBFIs want to raise funds to strengthen their capital base while other companies want to expand their businesses, BSEC officials said.

According to an instruction from the BSEC, companies must issue 10 percent of the units of their perpetual bonds through public offerings and the bonds must be listed on the stock exchange.

Bankers said bonds were more profitable and faster than other means of raising capital.

Interest expense paid on subordinated debt is also tax deductible, they said.

Newly issued subordinated debt can allow banks to reduce debt service requirements, increase regulatory capital, and preserve current holdings that might otherwise be diluted by increasing equity, they said.

Bangladesh Finance and Investment Company will issue zero coupon fixed rate non-convertible bonds worth Tk 200 crore, DBH Finance Corporation will issue zero coupon bonds worth Tk 300 crore and Strategic Finance and Investment Limited will issue perpetual variable rate non-convertible bonds valued at Tk 500 crore.

Strategic Finance will raise Tk 450 crore in the private placement and Tk 50 crore in the public offering to be listed on the stock exchange.

BURO Bangladesh, a microcredit organization registered under the Society Act, 1860, requested to raise 150 crore Tk by issuing zero coupon bonds while United Airways intended to increase 150 crore Tk by issuing convertible bonds .

Premier Cement will also issue and offer 1,260 cumulative non-convertible fully redeemable preferred shares at a par value / issue price of 2,500,000 Tk each. The total issue size of the amount will be Tk 315 crore.

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