Pubali Bank has received approval from the Bangladesh Securities and Exchange Commission (BSEC) to raise Tk 400 crore in funds by issuing unsecured, non-convertible, and redeemable subordinated bonds for a fourth time.

The approval came at a BSEC meeting at its office in Dhaka yesterday.

Subordinated bonds are ones that rank below other, more senior loans or securities with respect to claims on assets or earnings.

An unsecured bond refers to one that is not backed by any assets, while "non-convertible" indicates that it can not be converted into shares or equities.

Redeemable bonds can be redeemed or paid off by the issuer prior to the maturity date.

The face value of each unit of the bond is Tk 10 lakh. Its coupon rate would be the reference rate, meaning the six-month moving average rate of treasury bills, and an additional 3 percent.

The face value of each unit of the bond is Tk 10 lakh

The lender will raise the fund through private placement among institutional investors and high-net worth individual investors.

With the bond proceeds, the lender will strengthen its capital base under Basel III, which is an international regulatory accord on reforms designed to mitigate risk within the international banking sector by requiring banks to have more capital on hand.

DBH Finance is the trustee of the bond while UCB Investment the arranger.