Grameenphone issues BDT 4,250 million bonds in private placements

Grameenphone issues BDT 4,250 million bonds in private placements
Grameenphone Ltd. today signed agreements with ten institutions for raising BDT 4,250 million from the local capital market through issuance of coupon bearing bonds on a private placement basis.
Grameenphone will be issuing 425 bonds, denominated in BDT 10 million each. The bonds will be issued in two tranches, one with a 540 day term and the other with a 720 day term. All the bonds will carry an interest rate of 14.5% per annum. The bonds will be unsecured and non-convertible. The bonds will not be listed in any of the bourses but a free transferability structure will mean the instruments can easily be bought and sold over the counter.
The bonds are the first of their kind in the Bangladesh capital market. Grameenphone and the bonds have both been rated as “AAA” by the Credit Rating Agency of Bangladesh (CRAB), which is the highest credit rating given by CRAB. Citibank N.A. Bangladesh is the Arranger and Placement Agent for the transaction.

Grameenphone has taken the initiative to look beyond the conventional bank loan structure and into the capital market in the form of issuing a debt instrument to meet its funding needs. Grameenphone will invest the proceeds of the bonds in capital expenditure to improve the infrastructure of the company and will also use the proceeds to prepay a portion of the company’s short term debt. In addition to raising capital, the move will help reduce the liquidity risk and better match the asset liability maturity profile of the company.

“Grameenphone is proud to be able to contribute to a meaningful development of the Bangladesh capital market by introducing new debt instruments and creating more awareness in the domestic market,” said Grameenphone CEO Anders Jensen. “A placement of this kind will provide the bond market of the country a much needed boost and pave the way for other companies to explore this new avenue of financing.”