The Bangladesh Securities and Exchange Commission (BSEC) has approved a Tk 1,200 crore subordinated bond issued by City Bank, one of the country’s leading private banks. The seven-year bond aims to strengthen the bank’s Tier-2 capital and support its growing lending operations across corporate, retail, and SME sectors.
The approval was granted during the 1007th commission meeting of BSEC, chaired by Khondkar Rashed Maqsud on Tuesday. At the same session, BSEC also extended the consent validity periods for bonds issued by Jamuna Bank and Trust Bank. The regulator confirmed the decisions in an official press release.
Bond Features and Terms
The City Bank bond is structured as unsecured, non-convertible, fully paid-up, fully redeemable, and coupon-bearing subordinated debt. Its coupon rate will be determined by adding a 3% margin to the prevailing benchmark rate. The issuance will be made through a private placement, targeting institutional investors, banks, corporates, individual investors, and mutual funds, with each unit priced at Tk 10 lakh.
Proceeds from the bond will be used to expand lending in corporate, retail, and SME sectors, supporting the bank’s strategic growth plans. EBL Investment Limited will serve as the trustee, while City Bank Capital Resources Limited and IDLC Investments Limited will act as arrangers. The bond will be listed on the Alternative Trading Board, enhancing market transparency.
City Bank Managing Director Masrur Arefin stated, “We have the legal capacity to raise around Tk 2,000 crore in Tier-2 capital. With this issuance of Tk 1,200 crore, our capital adequacy ratio will exceed 18%, significantly above the statutory minimum of 12.5%. Maintaining this level of capital is critical for a fast-growing bank to support expected lending growth in the coming years.”
Other Bond Consent Extensions
BSEC also approved the extension of bond consents for Jamuna Bank (Tk 800 crore) and Trust Bank (Tk 500 crore) until 30 September 2026, marking the final extension granted for these instruments.
Key Details of City Bank Bond
| Feature | Details |
|---|---|
| Issuer | City Bank (Private Sector) |
| Bond Type | Subordinated, Unsecured, Non-Convertible |
| Tenure | 7 years |
| Coupon Rate | Benchmark Rate + 3% margin |
| Face Value per Unit | Tk 10 lakh |
| Placement | Private, institutional and retail investors |
| Trustee | EBL Investment Limited |
| Arrangers | City Bank Capital Resources Ltd, IDLC Investments Ltd |
| Listing | Alternative Trading Board |
| Purpose | Boost Tier-2 capital for corporate, retail, and SME lending |