Home ›› 27 Apr 2023 ›› Stock
LankaBangla Finance has recently completed the full subscription of a privately placed Tk 300 crore worth of non-convertible, zero-coupon bond issue.
The bond issue successfully lured a diverse group of investors, including individuals, corporates, banks, insurance compa-nies, mutual funds, and pension and gratuity funds, said a media statement issued on Wednesday.
This was the fourth bond issued by LankaBangla Finance so far.
This bond was issued as per the Bangladesh Securities and Exchange Commission (Debt Securities) Rules, 2021 after receiv-ing consent from both the Bangladesh Bank and the Bangladesh Securities and Exchange Commission (BSEC), the press statement read.
The bond was issued in dematerialised form and would be listed on the Alternative Trading Boards of the Dhaka Stock Ex-change and Chittagong Stock Exchange. IIDFC Capital Limited is the trustee of the issue and Green Delta Capital Limited acts as the mandated lead arranger.
LankaBangla Finance has been proactively seeking to diversify its funding sources, including issuing bonds, to ensure better matching of assets and liabilities. This move is in line with the central bank’s recommendation for all financial institutions to increase their reliance on bonds to better manage their balance sheet.
Meanwhile, the BSEC is working to develop the country’s bond market to offer investors more fixed-income investment opportunities.
A zero-coupon bond is sold at a discount to its face value and redeemed at its face value at maturity, without paying any interest during the term.
In other words, the investor buys the bond at a price below its face value and receives the full face value at maturity.
Currently, income from zero-coupon bonds is fully tax-exempted for all investors, except for banks, financial institutions, and insurance companies.
