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Pran Agro issues internationally guaranteed Tk 210cr bond

Pran Agro issues internationally guaranteed Tk 210cr bond

Published on: 31st May, 2021

Pran Agro has issued a non-convertible and redeemable bond worth Tk 210 crore, or equivalent of $25 million, with 100 per cent credit guarantee from a global company, a first of its kind in the country. GuarantCo, a concern of Private Infrastructure Development Group (PIDG), has given the credit guarantee to the bond.

The governments of the UK, Switzerland, Australia, Sweden, Netherlands and France have financed GuarantCo. MetLife Bangladesh subscribed the bond on May 19, 2021, according to a press release issued by Pran-RFL Group yesterday. The seven-year fixed coupon bond is the first-ever instrument of its kind in Bangladesh and is expected to play a transformational role in supporting alternate sources of infrastructure financing in Bangladesh.

Pran Agro, a member of the Pran-RFL Group, is one of Bangladesh's largest corporations in the food and agricultural sector. The group is running its farm-based business with 100,000 registered contract farmers, employing 110,000 people overall. The bond proceeds will be used to develop critical infrastructure in the agricultural supply chain and support Pran Agro's expansion plans in the local and export markets.

MetLife Bangladesh, the sole investor of the bond and the country's leading life insurance company, has further demonstrated its commitment to the funding needs for Bangladeshi companies. The subscription will further diversify MetLife's investment portfolio in Bangladesh. Green Delta Company has acted as the trustee and security agent of the bond. Riverstone Capital, an independent merchant bank based in Bangladesh, has acted as financial adviser to Pran Agro, which has also played a role in issuing the bond. The bond issuance has also signified a number of landmarks in the country's financial sector as it is the first blended finance structured bond. This is the first example for the financial sector where a global company has provided 100 per cent credit guarantee on-demand. On top of that, a global insurance company has invested in a bond for the first time.