- Date written
- May, 2021
- Contact for guarantco
- Marjolein van Kampen
- Communications Director
- +44 (0)738 8857097
- marjolein.van-kampen@guarantco.com
- Contact for PIDG
- Cecille Sorhus
- Head of Communications
- +44 (0)7917 302724
- cecille.sorhus@pidg.org
- Share
GuarantCo provided PRAN Agro, part of PRAN -RFL Group, with a 100 percent guarantee of a BDT 2.1 billion (c. USD 25 million) on-shore bond with a seven year tenor to attract domestic institutional capital from Bangladesh and support PRAN Agro’s expansion plans.
GuarantCo, a Private Infrastructure Development Group (PIDG) company, enabled a pioneering and transformational structure for the bond realising various firsts for the Bangladeshi market: the first blended finance structured bond of its kind; the first to be subscribed by an international insurance company and the country’s first directly issued digitised bond under Private Placement of Debt Securities Rules; no development finance institution has ever guaranteed a bond of this kind in Bangladesh.
GuarantCo’s partnership with MetLife and Riverstone Capital has been instrumental in working with various stakeholders and regulators to execute the transaction that will have a transformational impact on development of debt capital market in Bangladesh.
The proceeds from the bond guaranteed by GuarantCo will enable PRAN Agro’s expansion plans including land development, construction, storage facilities and processing machinery. The expansion is expected to result in over 20 percent increased sourcing from local farmers, contributing to rural income and food security which is critical during the COVID pandemic and high on the Government of Bangladesh’s agenda. In a period where many people have lost their jobs, additional investment into PRAN Agro will also provide much needed job security to both current and future employees.
In Bangladesh, one of the world’s fastest growing economies over the last decade, the agriculture sector is a key sector contributing to employment and share of GDP. A key part of PRAN Agro’s strategic plan is to meet increasing demand for processed agricultural products, both locally and overseas, and invest in both expanding its production lines and work force to grow the business in order to fuel economic growth in Bangladesh.
Emily Bushby, Interim CEO at GuarantCo, said:
“We are proud to have closed our second transaction in Bangladesh and support the Government to make a contribution to the country’s growing economy and increasing demand for processing local and overseas agricultural products whilst providing employment for local people including women. Given that no Bangladeshi company has ever raised any local currency bond financing with the assistance of a DFI and that Bangladesh has only had three listed bonds in the on-shore market, GuarantCo’s transaction with PRAN Agro will have a significant demonstration effect that will support the development of the debt capital markets. It will demonstrate another source of funding for businesses seeking to raise financing for infrastructure projects from which the local people in Bangladesh will benefit. GuarantCo is proud to have worked on this landmark transaction for Bangladesh and is grateful to policy makers in Bangladesh (BSEC, Bangladesh Bank and others) to have supported us all along despite a number of unforeseen circumstances most notably brought in by COVID pandemic.”
Uzma Chowdhury, CPA Director Finance at PRAN Agro, said
“With the issue of this bond, PRAN Agro Limited has established an alternate source of funding that can attract investors to the Bangladesh capital markets. Bangladesh, a nation of tremendous opportunity, is creating the investment opportunity with an innovative solution ensuring deeper financial markets, advancement of rural economy and enhanced sustainability. We thank our partners including BSEC, Bangladesh Bank and all other authorities for their support in achieving this milestone in the middle of the pandemic.”
Ala Ahmad, General Manager at MetLife Bangladesh, said:
“MetLife’s investment in this landmark bond is testament to our confidence in the growth potential of Bangladeshi companies as well as MetLife’s unique expertise in advanced investment and portfolio management.”