Paramount Textile PLC is going to raise funds of Tk 250 crore by issuing a type of non-convertible, fully redeemable and unsecured zero-coupon bond.

A zero-coupon bond is a debt security that does not pay interest but instead trades at a deep discount. It will render profit at maturity, when the bond is redeemed for its full-face value.

The Bangladesh Securities and Exchange Commission approved the bond during a meeting held last week at its office in Agargaon, Dhaka.

The bond's discount rate will range from 9 to 12 percent. It will be issued through private placement to institutional investors and high-net worth investors, with the face-value of each unit set at Tk 10 lakh.

With the bond proceeds, the textile maker will repay bank loans and expand its business.

The bond's trustee is Sena Kalyan Insurance and its arranger is NDB Capital Ltd. The bond will be listed on the alternative trading board of the stock exchanges.