DBH Finance will raise Tk 3.5 billion by issuing bonds with a view to providing home loans for middle- and lower-income people.
The Bangladesh Securities and Exchange Commission (BSEC) on Thursday approved the company's proposal for issuance of bonds.
As per the regulatory approval, the private housing financier will issue the bond to International Finance Corporation (IFC) through private offer.
The tenure of the DBH Finance's non-convertible and fixed coupon bearing senior bond will be five years.
UCB Investment is working as the trustee of the bond which will be listed with the exchange's alternative trading board.
DBH Finance, presently an 'A' category company on the Dhaka Stock Exchange, was formerly known as Delta Brac Housing Finance Corporation.
Meanwhile, the board of directors of Dutch-Bangla Bank PLC has approved the issuance of a 5th subordinated bond worth Tk 12 billion to strengthen the capital base of the bank.
The objective of this bond is to increase the Tier 2 capital to meet the bank's capital requirement under Basel III and to strengthen the regulatory capital base, according to a stock exchange filing on Thursday.
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.
The proceeds will be treated as capital and it will help the bank grow its investment and loan portfolio.
Subordinated bond is an unsecured loan or bond. This kind of bond helps lenders construct their mandatory Tier II capital base through bond proceeds within a specific tenure.
Nature of the Dutch Bangla Bank's bond will be fully redeemable, unsecured, and non-convertible, subordinated bond which will be issued through private placement.
The tenure of the bond will be seven years, including two-year grace period, subject to the approval of the Bangladesh Securities and Exchange Commission and the Bangladesh Bank, according to the filing.
Each share of the bank, which was listed on the Dhaka bourse in 2001, has remained stuck at floor at Tk 59.10 for the past eight months.
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