PRAN Agro issues first globally guaranteed bond in Bangladesh

PRAN Agro Limited (PAL), one of the largest agricultural and food processing companies in Bangladesh, has successfully achieved financial close of a landmark BDT 2,100 million (circa. US$ 25 million) non-convertible, redeemable bond, with 100% on-demand credit guarantee from GuarantCo and fully subscribed by MetLife Bangladesh as of May 19, 2021.

The 7-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 source of infrastructure financing in Bangladesh, a press release said.

PAL, a member of PRAN-RFL Group, is one of Bangladesh’s largest corporates in the food and agricultural sector, working with 100,000 registered contract farmers and employing 110,000 people across the Group. The Bond proceeds will be used to develop critical infrastructure in the agricultural supply chain and support PAL’s expansion plans in the local and export markets.

As the sole investor of the bond, MetLife Bangladesh, the country’s leading life insurance company, has further demonstrated its commitment to funding needs for Bangladeshi companies. The subscription will further diversify MetLife’s investment portfolio in Bangladesh.

The bond is backed by an on-demand guarantee by GuarantCo, part of the Private Infrastructure Development Group (PIDG), and funded by the governments of the United Kingdom, Switzerland, Australia and Sweden, through the PIDG Trust, the Netherlands, through FMO and the PIDG Trust, France through a stand-by facility and Global Affairs Canada through a repayable facility. GuarantCo is rated AA- by Fitch and A1 by Moody’s. 

 Green Delta Company Limited acted as the bond Trustee and Security Agent to the issue. Riverstone Capital Limited, an independent merchant bank based in Bangladesh, acted as financial advisor to PAL and arranger to the issue.

The bond issuance also signifies a number of landmark achievements in the financial sector of Bangladesh: (i) the first blended finance structured bond of its kind (ii) the first such bond guaranteed by GuarantCo or other international DFIs, (iii) the first to be subscribed by an international insurance company; and (iv) the country’s first directly issued digitized bond under Private Placement of Debt Securities Rules