DBBL to issue bonds worth Tk 12b

The market watchdog approved the proposal of Dutch-Bangla Bank Limited (DBBL) to float subordinated bonds worth Tk 12 billion.

The listed private commercial bank disclosed the information in a filing on Wednesday.

The bank took the decision to float its 5th installment subordinated bonds in December 2023. The Bangladesh Securities and Exchange Commission (BSEC) recently approved the application after evaluation.

The purpose of the bond is to increase the Tier 2 capital to meet capital requirements under Basel III and to strengthen the regulatory capital base of the bank.

Dutch-Bangla Bank PLC will issue Fully Redeemable, Non-Convertible, Unsecured, Floating-Rate Subordinated Bonds. The company also mentioned that a total of 1,200 bonds will be issued at the face value of Tk 10 million each.

Basel III is an international regulatory accord that introduced a set of reforms designed to mitigate risk within the international banking sector by requiring banks to maintain proper leverage ratios and keep certain levels of reserve capital in hand.

The Bangladesh Bank is implementing Basel III in the local banking industry so that banks have adequate capital to avert a systematic risk.

A subordinated bond is a type of bond where the bondholder is at the bottom of the repayment hierarchy if the borrowing company faces bankruptcy.

The tenure of the bond will be seven years, including a two-year grace period.

Meanwhile, the share price of DBBl is Tk 50.80 per share on the Dhaka bourse.

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