Bank Asia launches 4th Subordinated Bond

Bank Asia PLC has launched its 4th Subordinated Bond - a high-yield, floating-rate bond designed to strengthen the Bank's Tier-II capital and elevate its Capital to Risk-Weighted Asset Ratio (CRAR) in compliance with Bangladesh Bank's regulatory framework.

Arranged by City Bank Capital Resources Limited (CBCRL), this unsecured, non-convertible, fully redeemable bond is tailored for institutional investors and high-net-worth individuals, offering an attractive coupon rate of 12.89% p.a. as of April 2025 — a significantly higher return compared to traditional fixed deposit options.

At a time when the average bank Fixed Deposit Receipt (FDR) rates hover around 8–10%, the Bank Asia Subordinated Bond offers an attractive rate of 12.89%, backed by a solid AA1 long-term issuer rating from Credit Rating Agency of Bangladesh (CRAB) and an AAB bond rating from Emerging Credit Rating Ltd. (ECRL). This presents a rare combination of high yield with strong creditworthiness.

With a 7-year tenure and semi-annual coupon payments, the bond is structured for predictable income while the floating rate mechanism ensures protection against interest rate volatility — a feature especially attractive in a fluctuating macroeconomic environment.

The bond proceeds will be used to bolster Bank Asia's Tier-II capital base, allowing the bank to enhance its capacity for sustainable growth, ensure regulatory compliance, and continue supporting Bangladesh's economic development through responsible lending.