Bangladeshi Taka Bond called ‘Bangla Bond’ worth $9.5 million or Tk 800 million was listed on the London Stock Exchange (LSE) on November 11.
World Bank Group’s private sector lending arm International Finance Corporation (IFC) is the issuer of the bond, the proceeds of which have been planned for investment in private infrastructure projects and projects under the public-private partnership initiatives.
The fund would be used for expanding operations and distribution reach of PRAN Group, one of the leading processed food and beverage manufacturers in Bangladesh and a major private sector employer in the country. The IFC said the proceeds of the bonds would be used to provide financing to the PRAN Group to boost their processing capacities and deepen the rural distribution reach.
According to the IFC, the three-year bond was placed with asset managers dedicated to emerging markets, with the deal arranged by Standard Chartered Bank and Bank of America Merrill Lynch.
The interest rate of the bond is 6.3 per cent annually.
IFC was working for improvement of the private sector and the proceeds of the taka bond would be lent to private sector clients in Bangladesh since many international investors were interested in investing Taka denominated bond with a view to keeping their investment free from possible risks due to exchange rate fluctuation.
Finance Minister AHM Mustafa Kamal, Prime Minister’s Adviser on Private Sector Industry and Investment Salman F Rahman and Bangladesh High Commissioner to the UK Saida Muna Tasneem attended the enlistment ceremony, among others, in London.
Speaking on the occasion, Mustafa Kamal said: “The issuance of the ‘Bangla Taka Bond’ is the beginning of a long journey to our destination.”
Nikhil Rathi, chief executive officer, London Stock Exchange Plc and Director of International Development, LSE, said: “This landmark bond from IFC paves the way for the opening of the global Bangla bond market and raises the profile of the Bangladeshi Taka internationally. London is a leading exchange for local currency issuance, with Masala, Dim Sum and Komodo bonds raising in excess of $23 billion on our markets. We are delighted to welcome the Bangladeshi Taka to London and congratulate IFC on their pioneering transaction.”
IFC Vice President for Asia and Pacific Nena Stoiljkovic said: “The Bangla Bond, issued by triple A-rated IFC, will help provide Taka-denominated solutions for fast-growing corporates in agribusiness, manufacturing and financial services. We look forward to remaining an active partner in Bangladesh’s journey to attain greater prosperity.”
IFC Vice President and Treasurer John Gandolfo said: “The issuance of the inaugural Bangla Bond is a significant capital markets innovation and milestone for Bangladesh. IFC is committed to expanding local currency financing in emerging markets. In Bangladesh, we plan to continue issuing Taka bonds to fund local currency transactions.”
IFC issues local currency-denominated bonds in emerging market currencies as part of its regular program of raising funds for private sector and domestic capital markets development. In many cases, IFC is the first, or among the first, nonresident issuers in local currency both in domestic and international markets. IFC bonds are rated triple-A by Moody’s Investors Service and Standard & Poor’s.
Since the inception of the local currency lending programme in the early 2000s, the IFC has extended more than $16 billion in financing to its clients globally, in more than 50 currencies, including the Indian Rupee, Chinese renminbi, Brazilian real, South African rand, Turkish lira, Kazakh tenge, Sri Lankan rupee, Cambodian riel, Myanmar kyat and Russian ruble.