City Bank has received approval to raise Tk 1,200 crore through a bond issuance with a seven-year tenure. The approval was granted at a regular meeting of the Bangladesh Securities and Exchange Commission (BSEC) chaired by Khandaker Rashed Maksud. According to a press release signed by BSEC Director and Spokesperson Abul Kalam, the bond will be offered through private placement to institutional investors, banks, corporate entities, individual investors, and mutual funds. Each bond unit will have a face value of Tk 10 lakh and will be listed on the Alternative Trading Board (ATB) of the stock exchange.

The bond will be unsecured, non-convertible, fully redeemable, and carry an interest rate equal to the average of the upper limit of six-month fixed deposit rates plus an additional 3 percent. Shariah-based, foreign, and post-2012 approved banks will be excluded from the average rate calculation. It will be a subordinated bond, meaning other creditors will be paid before bondholders in case of bankruptcy.

Funds raised will be used by City Bank to provide loans in corporate, retail, and SME sectors. EBL Investments will act as trustee, while City Bank Capital Resources and IDLC Investments will serve as arrangers.