City Bank perpetual bond makes stock exchange debut
A perpetual bond is a hybrid security with no maturity date that has characteristics of both debt and equity
The trading of City Bank Perpetual Bond began on Monday on the Dhaka Stock Exchange (DSE) under settlement category "N".
DSE trading code for City Bank Perpetual Bond is "CBLPBOND", while the scrip code is 26011, said a press release.
A perpetual bond is a hybrid security with no maturity date that has characteristics of both debt and equity. These types of bonds are not redeemable but provide a never-ending stream of interest payments.
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According to the press release, this is the first perpetual bond to be listed on the stock market through direct listing with a subscription through 100% placement. Before this, perpetual bonds were listed through an initial public offering (IPO).
However, no unit of the bond was traded on the first day.
City Bank, a publicly listed private commercial bank, initiated the issuance process of the bond in 2019.
With approvals from Bangladesh Bank and Bangladesh Securities and Exchange Commission (BSEC) on 19 August 2020 and 9 December 2020 respectively, the bank completed a successful subscription of Tk400 crore on 7 March 2021 through private placement.
IDLC Investments Limited is the trustee of the bond while City Bank Capital Resources Limited is the arranger of the bond.
The bond is unsecured, contingent-convertible, fully paid-up, non-cumulative and BASEL-III compliant. The coupon range of the bond is from 6.00% to 10.00% and the coupon margin is 2.00%.
The bank's consolidated earnings per share (EPS) stood at Tk5.15 as of 31 December 2021 against Tk4.09 in December 2020. The bank's paid-up capital was Tk10.67 billion and its authorised capital was Tk15 billion at the end of 2021.
On this occasion, an inaugural ceremony was held at Dhaka Stock Exchange Tower. Tarique Amin Bhuiyan, managing director of the DSE; Sheikh Mohammad Maroof, acting managing director of DSE; Mohammad Mahbubur Rahman, additional managing director and chief financial officer of the City Bank; and Ershad Hossain, managing director and CEO of the City Bank Capital Resources Limited, were present.
