City Bank Secures Tk 1,200 Crore Subordinated Bond

The Bangladesh Securities and Exchange Commission (BSEC) has approved the issuance of a Tk 1,200 crore subordinated bond by City Bank, a leading private commercial bank in Bangladesh. The seven-year bond is intended to bolster the bank’s capital base and facilitate growth across corporate, retail, and SME lending segments.

The approval was granted during BSEC’s 1007th commission meeting, chaired by Khondkar Rashed Maqsud on Tuesday. At the same meeting, BSEC also extended the validity periods of bond consents for Jamuna Bank and Trust Bank, as confirmed in an official press release issued by the regulator.

Features of the Bond

The City Bank bond is unsecured, non-convertible, fully paid-up, fully redeemable, and coupon-bearing. The coupon rate will be determined by adding a 3% margin to the prevailing benchmark rate. The issuance will be conducted through a private placement, targeting institutional investors, banks, corporates, individual investors, and mutual funds. Each bond unit has a face value of Tk 10 lakh.

The proceeds from this bond issuance will be used to finance lending activities in corporate, retail, and SME sectors, providing the bank with the necessary capital to support its expansion plans. EBL Investment Limited has been appointed 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, ensuring transparency and accessibility for investors.

City Bank Managing Director, Masrur Arefin, explained, “We have the legal capacity to raise approximately Tk 2,000 crore in Tier-2 capital. With this Tk 1,200 crore issuance, our capital adequacy ratio will exceed 18%, well above the minimum requirement of 12.5%. Maintaining capital above this threshold is critical for a rapidly growing bank, particularly to sustain the expected growth in lending over the next few years.”

Extended Bond Approvals

In addition, BSEC approved the extension of consent validity for Jamuna Bank’s Tk 800 crore bond and Trust Bank’s Tk 500 crore bond until 30 September 2026. The regulator noted that this would be the final extension for these bonds.

Summary of City Bank Bond