BRAC Bank has launched a Subordinated Bond worth BDT 700 crore to enhance its Tier II Capital base, now available for subscription by investors. The bond will support its capital adequacy requirements as the bank has earned significant balance sheet growth in recent years.
Any individual or institution can invest in the bond with a minimum investment threshold of BDT 10 lakh. This is a safe and secure investment option for people, as it is issued by one the strongest banks in the country having highest credit rating from local and international rating agencies. The subscribers will be entitled to sizeable return as it offers very attractive return. Moreover, they will benefit from a reduced advance income tax (AIT) at 5% on interest income and no excise duty.
This seven-year tenor non-convertible, unsecured, fully redeemable, coupon-bearing, floating rate-based bond has already been approved by the Securities and Exchange Commission and Bangladesh Bank.
The coupon interest rate on the bond has been fixed as “Reference rate (Industry average of highest FDR rates) + 3% Margin”. The coupon rate will be reset half yearly based on the latest reference rate. As of December 2023, coupon rate comes10.97%, an attractive return compared to other investment options currently available in the market. The repayment of the principal amount will start from the 3rd year that will cover 20% each year, and subscribers will be entitled to receive their coupon interest half-yearly.
Commenting on investment scope of the bond, Selim R. F. Hussain, Managing Director & CEO, BRAC Bank, said, “The minimum ticket size has been kept as low as BDT 10 lakh to provide investment opportunity to all, particularly to small investors and micro savers. We are offering 3% higher interest rate on bond than the average FDR rate in the industry that will be exciting to the subscribers. The 20% principal repayment from 3rd year and 6 monthly coupon interest payment will also be lucrative to them.”
“Over the years, BRAC Bank has earned trust and reliability to a level where the investors can trust their money with the bank. That’s why we encourage people to opt for this golden investment scope which will lead them to a secure financial future,” he continued.
