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Taka bond ready to raise $10m from London mkt

Proceeds to be lent to private sector for investment

FHM HUMAYAN KABIR | October 27, 2019 00:00:00

Bangladesh is going to float a taka-denominated bond for the first time on the London Stock Exchange next month to raise funds for the local private sector, officials said on Saturday.

The International Finance Corporation (IFC), a sister concern of the World Bank, would float the taka-linked bond equivalent to US$10 million on the London bourse in the first phase, the global lending agency confirmed.

The bond is likely to be named "Bangla Bond" in the European market, said official sources.

Finance Minister AHM Mustafa Kamal and Prime Minister's Adviser on Private Industry and Investment Salman F Rahman are scheduled to attend the "Bangla Bond" enlistment ceremony at the London Exchange House on November 11, officials said.

They would also hold a press conference in London to brief journalists about the taka-bond.

"We will initially float a Taka-bond equivalent to US$10 million in the London stock market. It will be a test case for the

bond. If it clicks in the European market, we will raise the size of the bond," Senior Country Officer of the IFC Nuzhat Anwar told the FE.

"If the bond becomes popular, we have a plan to raise it up to $1.0 billion in the near future," she added.

The IFC official said the IFC would be a guarantor on the Taka-linked bond of Bangladesh in the international market.

Ms Anwar said the proceeds from the bond in the European market would be invested back in Bangladesh for development of the private sector.

"We'll mobilise the money through the taka-linked bond and then lend it to the private sector in Bangladesh for expanding their investment and business," the IFC Senior Country Officer said. Financial Institutions Division (FID) Additional Secretary Arijit Chowdhury said that the bond would help raise funds for the aspirant investors who want to investment in Bangladesh.

IFC Senior Country Officer Ms Anwar said the IFC so far floated bonds denominated in 52 currencies in the international market to mobilise funds for the countries concerned.

"We are hopeful that the Taka-linked bond will also be a hotspot for the European investors as they are the larger community among the bond market investors," she added.

Neighbouring India in 2014 offloaded its Rupee-denominated "Masala Bond" in the overseas market to finance its infrastructure projects.

The IFC, on behalf of the Indian government, initially offloaded a small-size Masala Bond. Its size was raised to $2.7 billion within 2-3 years for its popularity in the overseas markets.

An official said the IFC already reached a preliminary agreement with Bangladesh's Pran Group for financing its business development with earnings from the Taka bond.

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