LankaBangla Finance has recently completed full subscription of a privately placed BDT 3,000 million non-convertible, zero-coupon bond issue. The bond issue attracted a diverse group of investors, including individuals, corporates, banks, insurance companies, mutual funds, and pension and gratuity funds. This marks the fourth bond issued by LankaBangla Finance till date.
This bond has been issued in accordance with the Bangladesh Securities and Exchange Commission (Debt Securities) Rules, 2021 after receiving consent from both Bangladesh Bank and Bangladesh Securities and Exchange Commission (BSEC). The bond has been issued in dematerialized form and will be listed on the Alternative Trading Boards of Dhaka Stock Exchange and Chittagong Stock Exchange. IIDFC Capital Limited is the trustee to the issue and Green Delta Capital Limited has acted 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, 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 individual and corporate investors, except for banks, financial institutions, and insurance companies.