The Bangladesh Securities and Exchange Commission has approved Dutch-Bangla Bank's plan to raise Tk 1,200 crore in subordinated bonds, according to a stock exchange disclosure.

The bonds will be fully redeemable, non-convertible, unsecured and floating rate subordinated bonds. 

The private bank plans to issue 1,200 bonds, each with a face value of Tk 1 crore, to bolster its Tier-2 capital under Basel III regulations and enhance its regulatory capital base.  

A fully redeemable, non-convertible, unsecured, floating rate subordinated bond is a debt instrument that must be repaid in full upon maturity and cannot be converted into equity. It is not backed by collateral, and carries a variable interest rate. 

It is considered subordinated as it ranks below other debts in claims during liquidation.

The Dutch Bangla Bank's disclosure follows its  announcement on December 28, 2023, regarding the board's decision to proceed with the bond issuance.  

Shares of Dutch-Bangla Bank fell by 0.78 percent to Tk 51.2 during mid-day trading on the DSE today.