Five scheduled banks have received the nod from the Bangladesh Securities and Exchange Commission (BSEC) to raise a total of Tk 2,000 crore to strengthen their capital base by issuing bonds.

Islami Bank will raise Tk 500 crore, Trust Bank Tk 450 crore, Dhaka Bank Tk 400 crore, Bank Asia Tk 400 crore and Exim Bank Tk 250 crore, according to a press release issued by the BSEC yesterday.

Islami Bank will raise funds by issuing fifth mudaraba unsecured, non-convertible, fully redeemable, floating rate subordinated bonds.

Trust Bank will raise funds by issuing unsecured, non-convertible, fully redeemable, subordinated bonds.

The coupon rate of both bonds will be the same as the reference rate, meaning the six-month moving average rate of treasury bills plus an additional 3 percent. The face value of each unit of the two bonds will be Tk 5 lakh.

Bank Asia and Dhaka Bank got the nod from the stock regulator to raise funds by issuing unsecured, non-convertible, fully redeemable, floating-rate bonds.

The face value of each unit of Dhaka Bank's bond will be Tk 10 lakh, while the face value of each unit of Bank Asia's bond will be Tk 1 crore, according to the press release.

Exim Bank will raise funds by issuing unsecured, non-convertible, redeemable, floating-rate subordinated bonds.

Its coupon rate will be the reference rate and an additional 3 percent.

The face value of each unit of the bond is Tk 5 lakh.

Subordinated bonds are ones that rank below other, more senior loans or securities with respect to claims on assets or earnings.

An unsecured bond refers to one that is not backed by any assets, while "non-convertible" indicates that it cannot be converted into shares or equities.

Redeemable bonds can be redeemed or paid off by the issuer prior to the maturity date.