LankaBangla Finance, a leading non-bank financial institution, received approval from the Bangladesh Securities and Exchange Commission (BSEC) to issue a unique Tk 2 billion bond.
This marks the fourth zero-coupon bond issued by the company. Unlike traditional bonds that pay regular interest, this bond won’t offer investors periodic payouts. Instead, it will be issued at a discounted price and redeemed at full face value upon maturity. This approach allows LankaBangla to raise capital immediately while investors earn profits through the price difference.
The funds raised will be used to bolster LankaBangla’s liquidity and support its ongoing financing needs. This move comes at a crucial time when many businesses are facing tight cash flow due to the economic slowdown.
Zero-coupon bonds offer several advantages for both issuers and investors. For issuers, they provide immediate access to capital without incurring ongoing interest payments. For investors, they offer potentially higher returns compared to traditional bonds, especially in a low-interest-rate environment.