The Bangladesh Securities and Exchange Commission (BSEC) on Wednesday gave its approval to Trust Bank's issuance of a Tk 400 crore non-convertible and subordinated bond, aimed to strengthen its additional tier 2 capital.
Each unit of the bond was set at Tk 1 crore.
Green Delta Insurance will be the trustee of the bond, while Standard Chartered Bank is the mandated lead arranger.
The nod was given during the stock market regulator's 754th commission meeting, led by its chairman Shibli Rubayat-Ul-Islam.
Issuing a redeemable non-convertible unsecured subordinated bond is expected to help the commercial bank fulfil its Basel III requirements.
Currently, the local bond market is dominated by redeemable subordinated bonds mainly issued by commercial banks; which help them construct their mandatory secondary capital base through the bond proceeds within a specific tenure.
The Bangladesh Bank is implementing Basel III in the local banking industry so that banks are adequately capitalised to avert a systematic risk.
Basel III is an international regulatory accord that introduced a set of reforms designed to mitigate risk within the international banking sector by requiring banks to maintain proper leverage ratios and keep certain levels of reserve capital in hand.
During the commission meeting, Index Agro Industries' application for selling 82.53 lakh general shares through an initial public offering (IPO) was also approved.
The regulator had previously approved a 20 per cent discount on the company's primary shares, for which general investors will be able to buy Index Agro’s shares at Tk 50 instead of Tk 62 at the IPO.
The agro-based company's prospectus states that they intend to use Tk 50 crore from the IPO fund to install new machinery at its plant and repay some of its bank loans.
According to its audited financial statements for the year ending on June 30, 2019, Index Agro’s weighted net asset value per share was Tk 45, while earnings per share was Tk 7.1.
Incorporated in 2000, Index Agro Industries commenced operations with a poultry hatching and breeder facility to cater to the growing demand for quality pullets for the promising local poultry industry.
The company produces poultry and fish feed and day-old chicks.
AFC Capital and EBL Investment will act as issue managers.