Meghna Bank is issuing its second subordinated bond worth Tk 400 crore to strengthen its capital base and support business expansion, securing approval from Bangladesh Bank and the Bangladesh Securities and Exchange Commission (BSEC).

The seven-year bond proceeds will be used to strengthen the bank’s Tier-II capital, enabling it to expand lending and investment activities while enhancing its financial capacity.

According to a press release issued by the bank, the bond carries a floating coupon rate determined by adding a 3 per cent margin to the average of the highest six-month fixed deposit rates offered by commercial banks.

As of September 30, the annual coupon rate stood at 12.05 per cent, comprising a reference rate of 9.05 per cent and a 3 per cent margin. The rate will be adjusted in line with changes in the reference rate.

The bond has a face value of Tk 5 lakh per unit and will be issued through private placement to eligible individual and institutional investors, subject to applicable laws and conditions.

Meghna Bank plans to list the bond on the main board of the Dhaka Stock Exchange (DSE), allowing investors to trade it through the stock market after listing.

Investors will receive coupon payments every six months, while repayment of the principal will begin at the end of the third year. Subsequently, 20 per cent of the original investment will be repaid annually over the remaining five years.

The bank said the bond would provide an alternative investment opportunity while contributing to the development of Bangladesh’s corporate bond market.

It also expects the funds to support industrialization, investment in productive sectors, entrepreneurship and business expansion, potentially creating new employment opportunities.