The zero-coupon bond will open up alternate investment avenues for corporates and individuals
Standard Chartered Bangladesh (SCB) is set to become the first foreign bank to issue a zero-coupon bond in Bangladesh, an important feat in the development of the country's debt capital market.
The bank has received all the regulatory approvals for issuing Tk850 crore zero-coupon bonds, according to a press release.
The zero-coupon bond will open up alternate investment avenues for corporates and individuals.
With this offering, the bank is leveraging strong investor confidence in its strategy and outlook, and the quality of its financial position to increase its liquidity, the release added.
Naser Ezaz Bijoy, chief executive officer, Standard Chartered Bangladesh, said: “As a trusted and reliable issuer with a ‘AAA’ credit rating for over a decade, we believe our offering will support the development of Bangladesh’s capital market on one hand, while offering depositors a new avenue to invest in a product that offers tax-free returns.”
“I am also grateful to our regulators, Bangladesh Securities and Exchange Commission (BSEC) and Bangladesh Bank, especially Prof Shibli Rubayat-Ul-Islam, BSEC chairman and his team for supporting us in completing this pioneering transaction and their commitment towards the development of the bond market, which will play an important role in mobilizing long-term financing for the sustainable growth of our economy,” he added.
Prof Shibli Rubayat-Ul-Islam, chairman of the BSEC, said that they were working towards the development of Bangladesh’s capital markets, particularly the debt market, which will be vital for financing long-term needs of our industries and infrastructure.
"We hope Standard Chartered’s issue will encourage greater participation of our leading corporates, state-owned enterprises, municipalities in the debt capital, devising optimal financing strategies which will help them grow and prosper sustainably," he added.
Standard Chartered’s issue is a non-convertible, unsecured, fully redeemable, zero-coupon bond.
The maturity period for the product will be five years from the date of issue.
Green Delta Insurance Company Limited will act as the trustee for this issue.
Standard Chartered is leading the debt capital market in Bangladesh as well as an acknowledged global leader in Asia, Africa and Middle East.
Since pioneering in 1997, the capital markets unit of Standard Chartered Bank has arranged over $7.50 billion equivalent local and foreign currency in power, telecommunication, infrastructure, food & beverage, textile, service, renewable energy and other key sectors.
The bank operates one of the country's most sophisticated dealing rooms with a diverse range of risk management products, pioneering a number of financial firsts – including FX option in 2006, commodity derivative in 2008, interest rate derivative in 2009, and zero-Coupon Islamic Certificate Issuance in 2019.