Orascom in record Bangladeshi issue
Friday, 19 March 2010
Robert Cookson
FT Syndication Service
HONG KONG: A mobile phone operator raised $102m through Bangladesh's biggest corporate bond deal, in another sign that the country's capital markets are flickering back into life.
Orascom Telecom Bangladesh, a subsidiary of Egypt's Orascom Telecom, smashed the previous record just four months after Grameenphone, its larger rival, sold shares for $71m in the country's largest initial public offering .
The two deals, while small in global terms, are an indication that investors are becoming more confident in Bangladesh, a country identified by Goldman Sachs as one of the N-11 ("Next Eleven") markets to watch in the 21st century.
"Investor confidence is coming back," said Shams Zaman, of Citi Bangladesh, which arranged the deal. "The Orascom bond shows that it's possible to raise sizable amounts of financing from the local market."
Other local companies are likely to sell bonds in the coming year, he added, from sectors including telecommunications, finance and pharmaceuticals.
Competition is heating up in Bangladesh's telecoms sector - in January, Bharti Airtel, the Indian telecoms group, bought 70 per cent of Bangladesh's Warid Telecom for an initial investment of $300m.
That followed a high-profile IPO by Grameenphone, Bangla-desh's biggest telecoms company, which raised $71m from local retail investors and a further $70m from selling shares to local institutions.
Grameenphone is a joint venture between Norway's Telenor and local microfinancier Grameen Bank, launched by Nobel Prize winner Muhammad Yunus .
Orascom Telecom Bangladesh, which trades under the name Banglalink, plans to use the proceeds of its bond sale to invest in network equipment and expand in rural Bangladesh.
The amortising senior secured bonds are denominated in the Bangladeshi taka. They have a 13.5 per cent coupon rate payable every six months and are due in 2014.
The size of the offering was increased from Tk4.25bn ($62m) to Tk7.1bn due to "huge interest" from investors such as mutual funds, insurance companies and commercial banks, Mr Zaman said.
Additional reporting by Amy Kazmin in New Delhi.
FT Syndication Service
HONG KONG: A mobile phone operator raised $102m through Bangladesh's biggest corporate bond deal, in another sign that the country's capital markets are flickering back into life.
Orascom Telecom Bangladesh, a subsidiary of Egypt's Orascom Telecom, smashed the previous record just four months after Grameenphone, its larger rival, sold shares for $71m in the country's largest initial public offering .
The two deals, while small in global terms, are an indication that investors are becoming more confident in Bangladesh, a country identified by Goldman Sachs as one of the N-11 ("Next Eleven") markets to watch in the 21st century.
"Investor confidence is coming back," said Shams Zaman, of Citi Bangladesh, which arranged the deal. "The Orascom bond shows that it's possible to raise sizable amounts of financing from the local market."
Other local companies are likely to sell bonds in the coming year, he added, from sectors including telecommunications, finance and pharmaceuticals.
Competition is heating up in Bangladesh's telecoms sector - in January, Bharti Airtel, the Indian telecoms group, bought 70 per cent of Bangladesh's Warid Telecom for an initial investment of $300m.
That followed a high-profile IPO by Grameenphone, Bangla-desh's biggest telecoms company, which raised $71m from local retail investors and a further $70m from selling shares to local institutions.
Grameenphone is a joint venture between Norway's Telenor and local microfinancier Grameen Bank, launched by Nobel Prize winner Muhammad Yunus .
Orascom Telecom Bangladesh, which trades under the name Banglalink, plans to use the proceeds of its bond sale to invest in network equipment and expand in rural Bangladesh.
The amortising senior secured bonds are denominated in the Bangladeshi taka. They have a 13.5 per cent coupon rate payable every six months and are due in 2014.
The size of the offering was increased from Tk4.25bn ($62m) to Tk7.1bn due to "huge interest" from investors such as mutual funds, insurance companies and commercial banks, Mr Zaman said.
Additional reporting by Amy Kazmin in New Delhi.