IFC to issue taka bond on Bangladesh stock exchange

By on September 11, 2021 0

| Update:
Sept. 11, 2021, 12:12 p.m.

The International Finance Corporation (IFC) plans to issue taka-denominated bonds in the Bangladeshi market to extend its financial support to industries and national agencies in need of funds.

Official sources said on Friday that the private sector lending arm of the World Bank Group had recently sought approval from the government of Bangladesh for issuing the bond.

“In a letter, IFC asked us to seek approval of its proposed BDT-denominated bond. She wants to raise money in the domestic market in order to invest in local businesses, ”said a senior official from the Ministry of Finance (MoF).

He said they had sought the advice of various relevant government agencies, including the Finance Division, the Financial Institutions Division as well as the Bangladesh Bank and the Bangladesh Securities Commission (BSEC), on this decision to the international financial institution.

After getting their opinion, they would review the proposal together and then the approval decision would be made, the official added.

A senior IFC official said they would issue the IFC BDT-denominated bonds on the Dhaka Stock Exchange through the securities regulator BSEC to raise funds for local industries and businesses to be financed.

The official said the amount of the proposed bond is yet to be determined, but will be issued based on investment requests from local businesses and industries.

“We would not repatriate the money to mobilize bonds. We will invest all funds in the projects of the private and public sector industries of Bangladesh,” said the official of the IFC.

IFC is currently lending to various Bangladeshi companies and private sector companies from its global funds. This time around, the Washington-based lender will provide cash in local currency to secure extended funds and reduce the risk of currency fluctuations.

Based on requests from local businesses, they plan to issue bonds on the Dhaka stock market in order to raise funds to lend to Bangladeshi businesses and agencies, the official said.

When asked, IFC’s senior country manager in Bangladesh, Ms. Nuzhat Anwar, told FE that private sector entities in Bangladesh have a huge demand for funds to expand their businesses and establish new businesses and factories.

“BDT-denominated bonds will help IFC finance these local companies and agencies to grow their businesses,” she said.

Previously, IFC first issued BDT-denominated ‘Bangla Bonds’ on the London Stock Exchange, valued at Tk 800 million ($ 9.5 million), to help expand operations and funding. distribution of funds in Bangladesh.

The three-year bond, listed on the UK stock market, was placed with dedicated emerging market asset managers, with the agreement arranged by Standard Chartered Bank and Bank of America Merrill Lynch.

The proceeds of the bond will be used to provide financing to the private Bangladeshi company PRAN Group to strengthen its processing capacities and expand the reach of rural distribution.

IFC’s bonds are rated three times by Moody’s Investors Service and Standard & Poor’s.

A senior finance ministry official said the IFC had offered to raise funds through bonds to finance agriculture, manufacturing and climate-related projects, as well as microfinance institutions.

He has a plan to finance Bangladesh SMEs and women-owned businesses and enterprises, he added.

Since the inception of the local currency loan program in the early 2000s, IFC has provided more than $ 16 billion in financing to clients around the world, in more than 50 currencies, including the Indian rupee, Chinese renminbi, the Brazilian real, the South African rand. , Turkish lira, Kazakh tenge, Sri Lankan rupee, Cambodian riel, Burmese kyat and Russian ruble.

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