Banglalink set to raise Tk 4.25b through issuing bonds
Thursday, 3 December 2009
Kayes M Sohel
Banglalink is set to raise Tk 4.25 billion through issuing bonds, a sign that paves the way to shore up the country's ailing bond market, officials said Wednesday.
The bonds are the second of its kind for Bangladesh's capital market after Grameenphone, the country's telecom giant, that issued same amount in August last year.
The country's second largest mobile operator, controlled by Egypt's Orascom Telecom Holding S.A.E. and Orascom Telecom Ventures Ltd, has received the green light from the Securities and Exchange Commission to raise the funds through private placement, a SEC high official told the FE.
According to the official, the value of the four and a half- year tenure bond will be Tk 10 million each and the coupon rate will be no more than 13.5 per cent annually. The bonds will be amortized.
A bond is a debt instrument, in which the issuer owes the holder a debt and is obliged to repay the principal and interest at maturity.
"We have approved Banglalink's proposal to raise the funds from the bond market," said a senior official of the securities regulator.
The fund will be used for expansion of Banglalink's function in the country and will be raised funds amongst institutions like banks, insurance companies, non-banking financial institutions in Bangladesh, said an official of the Banglalink.
US banking giant Citibank, N.A's Dhaka office is the placement agent and lead arranger for raising the funds.
The mobile operator's operating profit increased 25 percent to Tk 18.01 billion in the third quarter to September 2009 in the same period a year earlier.
The company's market share has also increased to 24.0 per cent against the last year's Q3 22.5 per cent.
In the six-operator market, however, Banglalink is in the second position with 12.27 million customers as of October this year.
Analysts said Banglalink's entry to the bond market after GP would help develop the country's bond market.
"It's a good move for making the bond market vibrant," said Fazlur Rahman, deputy managing director of AB Bank.
He, however, said the problem in Bangladesh's bond market is that bonds are not easily tradable.
"The market for bonds is so limited, which means that buyers have to hold them up to the maturity period. This is one of the reasons for limiting the growth of the bond market," he said.
Another bankers suggested that there should be scope to trade bonds easily so that buyers can liquidate their holdings whenever they need.
Banglalink is set to raise Tk 4.25 billion through issuing bonds, a sign that paves the way to shore up the country's ailing bond market, officials said Wednesday.
The bonds are the second of its kind for Bangladesh's capital market after Grameenphone, the country's telecom giant, that issued same amount in August last year.
The country's second largest mobile operator, controlled by Egypt's Orascom Telecom Holding S.A.E. and Orascom Telecom Ventures Ltd, has received the green light from the Securities and Exchange Commission to raise the funds through private placement, a SEC high official told the FE.
According to the official, the value of the four and a half- year tenure bond will be Tk 10 million each and the coupon rate will be no more than 13.5 per cent annually. The bonds will be amortized.
A bond is a debt instrument, in which the issuer owes the holder a debt and is obliged to repay the principal and interest at maturity.
"We have approved Banglalink's proposal to raise the funds from the bond market," said a senior official of the securities regulator.
The fund will be used for expansion of Banglalink's function in the country and will be raised funds amongst institutions like banks, insurance companies, non-banking financial institutions in Bangladesh, said an official of the Banglalink.
US banking giant Citibank, N.A's Dhaka office is the placement agent and lead arranger for raising the funds.
The mobile operator's operating profit increased 25 percent to Tk 18.01 billion in the third quarter to September 2009 in the same period a year earlier.
The company's market share has also increased to 24.0 per cent against the last year's Q3 22.5 per cent.
In the six-operator market, however, Banglalink is in the second position with 12.27 million customers as of October this year.
Analysts said Banglalink's entry to the bond market after GP would help develop the country's bond market.
"It's a good move for making the bond market vibrant," said Fazlur Rahman, deputy managing director of AB Bank.
He, however, said the problem in Bangladesh's bond market is that bonds are not easily tradable.
"The market for bonds is so limited, which means that buyers have to hold them up to the maturity period. This is one of the reasons for limiting the growth of the bond market," he said.
Another bankers suggested that there should be scope to trade bonds easily so that buyers can liquidate their holdings whenever they need.