DHAKA Jan 23 Bangladesh aims to sell its first
international bond this year, officials said on Wednesday,
taking advantage of low interest rates and soaring demand for
emerging debt from yield-starved investors.
Deputy central bank governor Shitangshu Kumar Sur Chowdhury
has been appointed to head a panel that will prepare the ground
for the bond sale, including inviting bids from potential lead
managers and arranging investor roadshows.
"In our first meeting we have decided to hold a meeting in
March with banks who act as frontrunners to issue bonds, such as
Standard Chartered and Citi NA," Chowdhury told Reuters.
"The government has decided to issue a sovereign bond. Exact
volumes, timeframe, interest or tenure of the bond has yet to be
decided. But things are going on the right direction," he added.
Chowdhury said the bond could be sized at $500 million or $1
Bangladesh's status as a least developed country means it is
entitled to concessional loans from institutions such as the
World Bank, International Monetary Fund and Asian Development
Bank, but conditionality and other factors can mean such loans
are disbursed only slowly.
Dhaka has a three-year $987 million loan deal with the IMF,
the first $141 million tranche of which was paid out in April
last year. Earlier this month, the government raised oil prices
by up to 11.5 percent to meet conditions for payment of the
second tranche, which also include increasing electricity
tariffs to cut subsidies.
Last year the World Bank cancelled a $1.2 billion credit
line for a bridge project because of alleged corruption.
The government's plan to float bonds dates back to 2011,
when high oil import bills coupled with a massive devaluation of
the local currency caused foreign exchange reserves to dwindle.
Reserves started to improve from the middle of last year,
reaching a record high of $13 billion early this month, although
central bank officials say they remain vulnerable to oil costs.
Bangladesh has held a Ba3 rating with a stable outlook from
Moody's and BB- sovereign rating with a stable outlook from S&P
for three years.
Emerging market borrowers issued record levels of new bonds
last year to take advantage of low borrowing costs and investors
search for yield. Bolivia, Mongolia and Zambia issued debut
bonds last year and more maiden issuers are expected in 2013.
(Reporting by Ruma Paul; Editing by Anis Ahmed and Catherine