Bangladesh bond first explained

Author: Ashley Lee | Published: 15 May 2014

The first-ever international bond offering from Bangladesh has highlighted that investors are searching for more diversified Asian credits. But the high yield bonds, sold by Bangladeshi telecommunications company Banglalink, were complicated by local regulations and rules on private placements.

Bangladesh is a rare sovereign that hasn’t yet tapped the international bond markets. Banglalink’s five-year offering was an opportunity for investors to diversify beyond Chinese and Indonesian issuers that dominate Asia’s high yield market, although the lack of comparables and a sovereign curve prompted increased scrutiny of the credit.

But the offering was complicated by local regulations such as currency controls, as well as rules on private placements. Because the sovereign had no prior experience in the international debt capital markets domestic regulators needed to be educated...