Brac to improve Tk 1,350cr through bonds
Brac, a good non-listed non-authorities organisation, possesses received the nod from the currency markets regulator to improve Tk 1,350 crore by issuing zero-coupon bonds.
A zero-coupon bond is a debt reliability that will not pay interest. Rather, it trades at a price reduction, rendering a earnings at maturity, when the relationship is redeemed because of its full face value.
The Bangladesh Securities and Exchange Commission (BSEC) yesterday approved the bond, whose face value is Tk 1 crore, according to a press release.
The bond is unprotected, non-convertible, and fully redeemable, and its own tenure is one and half years to five years. Corporate investors and great net-worth folks are eligible to choose the bonds through private positioning.
The largest NGO on the globe use the proceeds to expand its micro-finance activities.
MTB Capital Ltd is its trustee, and RSA Capital is working seeing that mandated lead arranger.
The BSEC fastened a condition to issuing the bond: it should be listed in the Alternative Trading Board (ATB).
The ATB is not activated yet. The relationship will be shown on the board once it really is activated. In that case investors can trade it on the system, explained Md Ashadul Islam, board secretary and compliance officer of MTB Capital.
The low cost rate of the bond will be 8.5 %. This means an investor can purchase a device of the bond at about Tk 77,04,500, he said.
Tushar Bhowmik, chief financial officer of Brac, said: "We are delighted to receive the approval from the BSEC. It is indeed an excellent achievement for both the microfinance sector and the relationship market of Bangladesh."
He said the acceptance from the Microcredit Regulatory Authority was even so pending and hoped that it might be granted in the near future to operationalise the issuance of the relationship.
The bond issuance is a fresh way of funding for microfinance, Bhowmik said.
"We are opting for bonds to enhance the livelihoods of people who need usage of affordable financial solutions, especially in marginalised communities, in a far more efficient method," he said.
The CFO expected that the bonds would start avenues for non-loan company institutions to invest in Brac's microfinance programme.
The NGO provided financial companies to 7.4 million consumers in 2019, regarding to its total annual report.
It disbursed $5.09 billion in loans among the customers in 2019, up 21 % year-on-year.
