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Nagad to issue BDT 5 billion zero-coupon bond

Nagad is set to issue a zero-coupon bond of Tk 5 billion with a face value Tk 7.5 billion at the end of its five-year maturity, in a first for a mobile financial services provider in Bangladesh.

Strong interest from many foreign investors has already been sighted since the announcement of the bond for the DFS disruptor in Bangladesh.

Reportedly, Kiu Global, a US-based digital services company, already expressed interest to subscribe an amount equivalent to USD 30 million of the mentioned bond., said a media release Tuesday.

The announcement of the landmark issue was made Monday at New York during an investor show titled “The Rise of Bengal Tiger: Potentials of Trade & Investment in Bangladesh”.

It wasorganized by the Bangladesh Securities and Exchange Commission (BSEC).

Nagad, one of the key partners of the event, received initial approval from the BSEC for the bond issue.

Riverstone Capital is acting as the arranger of the bond wherein Green Delta Capital will be the trustee.

Nagad, will use the proceeds from the bond subscription for future readiness of the company’s digital infrastructure; development of network, hardware and the digital financial service platform; purchase IT equipment; marketing and promotional activities; and working capital financing.

All these are aimed at accelerating the Digital Bangladesh initiative of Honorable Prime Minister Sheikh Hasina and will be an integral part of it, the release also said.

Tanvir A Mishuk, managing director and co-founder of Nagad, said, “With the development of the capital market in Bangladesh, the bond market has also become vibrant in recent past. We consider this as a better source to raise investment. Moreover, Nagad has always been innovative and that is why we chose bond market over traditional financing.”

Professor Shibli Rubayat-Ul-Islam, Chairman of BSEC, said, the BSEC, in collaboration with our ecosystem of regulators and stakeholders, is working towards the development of Bangladesh’s capital markets, particularly debt market, which will be vital for financing long-term needs of our industries and infrastructure.

He hoped that Nagad’s issue will encourage greater participation of our leading corporates, state-owned enterprises, municipalities in the debt capital, devising optimal financing strategies that will help them grow and prosper sustainably.

Nagad’s initiative of issuing its first corporate bond is commendable and will contribute towards setting the right direction for the capital market.

The BSEC organized this investment roadshow with the view to showcasing the strength and opportunities of business and investment in Bangladesh for foreign investors. High-level delegates from Bangladesh and the US, along with business conglomerates and investors were attending different seminars in New York, Washington DC, Los Angeles (California) and Silicon Valley (Santa Clara), said the release.