IFIC Bank withdraws its 1000 Tk perpetual bond application

TBS Report

03 October 2021, 21:05

Last modification: 03 October 2021, 21:16

IFIC Bank will withdraw its application to the Bangladesh Securities Commission (BSEC) for approval to issue perpetual bonds valued at Tk 1,000 crore.

The private sector lender, which is listed on the capital market, said the withdrawal is required at this time as another application is being submitted to the securities regulator to issue a non-subordinated bond. convertible of 500 crore Tk.

Perpetual Bonds are debt instruments with no maturity and the product bolsters a bank’s additional Tier I capital required to comply with Basel-III.

Investors cannot sell perpetual bonds themselves, while the issuer can recall their bonds with regulatory approval depending on the permitted contexts.

On the other hand, subordinated bonds have terms after which investors get their money back. Subordinated bond products strengthen a bank’s Tier II capital base.

IFIC Bank, which is obtaining approval for two of its previous subordinated bonds, will now apply for its third subordinated bond.

The long term credit rating of the lender is “AA” which is “ST-2” for the short term.

Credit score reflects a company’s financial ability to repay its debts.

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