LankaBangla Finance has received approval from the Bangladesh Securities and Exchange Commission to issue a Tk200 crore ($23.5 million) fourth zero coupon bond. The non-bank financial institution plans to utilize the funds for lending to individuals, corporations, and small and medium enterprises. The non-convertible, fully redeemable, unsecured bond will carry a discount rate between 9% and 10%.
Unlike coupon-bearing bonds, LankaBangla’s zero coupon bond will be issued at a discounted price (Tk8.33 lakh per unit), with the principal amount plus interest repaid in six equal half-yearly installments. Zero coupon bonds, known for tax exemptions in Bangladesh, are particularly attractive to investors, offering tax-waived income for individuals and corporations.
The bond targets institutional and high-net-worth individual investors, with Green Delta Capital as the trustee and LankaBangla Finance as the arranger. The privately placed instrument will be tradable on the Alternative Trading Board.
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