The securities regulator has approved AB Bank Ltd to issue a perpetual bond worth Tk600 crore.
The listed commercial bank will strengthen its additional Tier-1 capital base with the collected money, according to the Bangladesh Securities and Exchange Commission (BSEC).
This would be an unsecured, transferable, non-cumulative and contingent-convertible bond, the regulator said on Tuesday.
Local institutional investors and high-net-worth individuals can buy the bond units through a private placement. General investors can also buy units through a public offering.
Tk540 crore will be issued through private placement and the remaining Tk60 crore through a public offering.
The coupon rate will be 6% to 10% of the bond. The minimum subscription amount of the bond, both private placement and public offer, will be Tk1,000.
Local merchant bank MTB Capital Ltd will act as the trustee of the bond while another investment bank Riverstone Capital Limited will be the issue manager. Besides, BMSL Investments Limited is working as the underwriter of the bond.
AB Bank Ltd was listed on the capital market in 1983.
The bank logged a profit of Tk39.40 crore and earnings per share (EPS) stood at Tk0.50 for the year ended in 2020. The bank paid a 5% stock dividend for 2020 to strengthen the capital base and to support business growth in compliance with Bangladesh Bank's 2020 policy on bank dividends.
Earlier, in 2019, its net profit was Tk12.32 crore and the bank paid a 5% stock dividend.
Out of the bank's total shares, sponsors and directors jointly hold 31.67%, government 0.57%, institutions 25.29%, foreign investors 0.88%, and general investors 41.59%.