Nagad to issue BDT 5 billion zero-coupon

Nagad, the mobile financial services arm of Bangladesh Postal Department, is set to issue a zero-coupon bond of BDT 5 billion with a face value BDT 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, has already expressed interest to subscribe a BDT amount equivalent to USD 30 million of the mentioned bond.
The announcement of the landmark issue was made on Monday in New York in the US during an investor show styled “The Rise of Bengal Tiger: Potentials of Trade & Investment in Bangladesh” organized by the Bangladesh Securities and Exchange Commission (BSEC). Nagad, which is one of the key partners of the event, has 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, the fastest growing mobile money company in the world, 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 that.
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.”
Mishuk added, “Nagad is a fast-growing company that achieved 53 million customers within just two years and a quarter. To keep the growth momentum, it’s essential to build a new digital ecosystem and infrastructure. As a state-owned entity, we have to put our efforts to reach the vision of Digital Bangladesh. With this investment, we will enhance the digital ecosystem that will help us to cater to more people with innovative services and eventually that will be helpful to achieve Digital Bangladesh goal.”
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.
Shibli Rubayat-Ul-Islam said, “We hope 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.”
Nagad, a change-maker in the government’s safety-net disbursement dynamics of Bangladesh, has launched its commercial operation on March 26, 2019 by Prime Minister Sheikh Hasina with a vision to financially inclusion all walks of life and upgraded them on a digital platform.
Salman Fazlur Rahman MP, Private Industry and Investment Adviser to the Hon’ble Prime Minister Sheikh Hasina; Abdur Rouf Talukder, Senior Secretary of the Finance Division under Ministry of Finance; Professor Shibli Rubayat-Ul-Islam, Chairman of BSEC; Tapan Kanti Ghosh, Secretary of Ministry of Commerce; Md. Sirazul Islam, Executive Chairman of Bangladesh Investment Development Authority (BIDA); Major General Md Nazrul Islam, Executive Chairman of Bangladesh Export Processing Zones Authority (BEPZA); Steven Landman, Chief Executive Officer of Kiu Global, were also present at the declaration event in New York along with other high-level delegates from Bangladesh.
The BSEC has 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 are attending different seminars in New York, Washington DC, Los Angeles (California) and Silicon Valley (Santa Clara).