The subscription period for AIBL Mudaraba Perpetual Bond for general public and eligible investors (EIs) will begin on Monday, aiming to raise Tk 500 million through initial public offering.
The subscription of the bond through the electronic subscription system of the stock exchanges will continue until November 14, according to Dhaka Stock Exchange (DSE).
Minimum subscription amount is Tk 5,000 and there is no maximum bar.
Participating eligible investors will be required to pay full subscription amount and a subscription fee of Tk 3,000 through Mercantile Bank in between 10:00am on Monday to 2:00pm on November 14.
On August 29, the Bangladesh Securities and Exchange Commission (BSEC) approved the proposal of Al-Arafah Islami Bank Ltd to issue the Mudaraba perpetual bond worth Tk 5.0 billion.
Of the Tk 5.0 billion, Tk 4.50 billion will be issued through private placement and the remaining Tk 500 million through public offering in compliance with the BSEC public offering rules.
Al-Arafah Islami Bank, the shariah-based listed private commercial bank, will strengthen its additional Tier-1 capital base with the collected money.
This is the unsecured contingent-convertible floating rate bond. The coupon rate will be 6.0 per cent to 10 per cent of the bond.
Local institutional investors such as non-banking financial institutions, insurers, banks, and asset management firms and high-net-worth individuals can buy the bond units through a private placement.
However, the minimum subscription amount for private placement is Tk 50 million.
MTB Capital Ltd is acting as the trustee of the bond, while two other investment banks -- Prime Bank Investment Ltd and UCB investment Ltd -- are working as its arranger and issue manager respectively.
Besides, Islami Bank Capital Management Ltd is working as underwriter of the bond.
Each share of Al-Arafah Islami Bank, listed on the DSE in 1998, closed at Tk 26.20 on Thursday. Its shares traded between Tk 17.90 and Tk 30.10 in the last one year.
The bank disbursed a 15 per cent cash dividend for the year ended on December 31, 2020. In 2019, it provided a 13 per cent cash dividend.
The bank's paid-up capital is Tk 10.65 billion and authorised capital is Tk 15 billion, while the total number of securities is 1.06 billion.
The sponsor-directors own 37.39 per cent stake in the bank, while institutional investors own 29.39 per cent, foreign investors 0.53 per cent and the general public 32.69 per cent as on September 30, 2021, the DSE data showed.
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