Dhaka, Bangladesh (BBN) - A financial institution and a non-government organization (NGO) have sought permission from the central bank to float zero-coupon bonds and asset-backed securities worth Tk 9.0 billion to strengthen their financing capacity.
The Industrial and Infrastructure Development Finance Company Limited (IIDFC), a leading non-banking financial institution (NBFI), has submitted an application to the Bangladesh Bank (BB), the country’s central bank, seeking permission to issue zero-coupon bonds worth BDT4.0 billion.
On the other hand, the BRAC, a leading NGO, has also applied to the central bank for floating asset-backed zero-coupon bonds amounting to BDT 5.0 billion, officials said.
"We've received two applications from two organizations seeking permissions to float zero-coupon bonds and asset-backed zero-coupon bonds," a senior official of BB told BBN in Dhaka.
"We'll issue no-objection certificates to the organizations concerned after fulfillment of our requirements," another BB official said, adding that the Securities and Exchange Commission (SEC) would give final approval to the organizations to float such securities after the issuance of certificates by the central bank.
The central bank has already given permission to the Uttara Finance and Investment Limited for floating zero-coupon bond worth BDT 2.0 billion while the United Leasing Company Limited has already obtained permission from the central bank to issue such bond worth BDT 500 million.
Currently, there are six zero-coupon bonds and one asset-backed zero-coupon bond, issued by five NBFIs.
The NBFIs are Industrial Promotion and Development Company of Bangladesh Limited (IPDC), IDLC Finance Limited, United Leasing Company Limited, Industrial and Infrastructure Development Finance Company Limited (IIFCL) and Delta Brac Housing Finance Corporation Limited.
Earlier, the central bank introduced guidelines on mortgage-backed securities (MBS) market in Bangladesh aiming to bring dynamism in the country's bond market.
"The overall bond and securitization market in Bangladesh has not yet flourished significantly. Specially, the concept of 'mortgage-backed securities market' is quite new," the central bank said in its guideline, issued earlier.
BBN/SI/SS/AD-25Npvember08-9:15 AM (BST)