BRAC Bank 25% Subordinated Convertible Bonds RPO

Repeat Public Offering (RPO) of BRAC Bank 25% Subordinated Convertible Bonds
Opening date for subscription: December 5, 2010
Closing date for subscription: December 9, 2010
For Non-Resident Bangladeshi (NRB) Quota, subscription closes on: December 18, 2010

Use of RPO Proceeds
BRAC Bank Limited is raising Tier II capital through repeat public offering in order to comply with the regulatory requirement of Bangladesh Bank. The proceeds of the public offering will strengthen the capital base of the bank and augment business expansion. The fund thus raised would be generally used for undertaking normal commercial banking activities.

Issuer: BRAC Bank Limited

Lead Arranger: RSA Capital Limited

Issue Manager: IDLC Finance Limited

Investors: 90% of the total Issue Size shall be offered to institutional investors including onshore and offshore investors and the remaining 10% shall be offered to public through IPO.

Issue Size: BDT 3,000,000,000 (Bangladesh Taka Three Billion)

Issue Type: Subordinated Convertible Bond Issue (“Bond”) of BRAC Bank Ltd. with qualification as Tier 2 Capital.

Tenor: 84 Months from the date of issue, bullet repayment.

Face Value: Each Bond will have a Face Value of BDT 1,000 (One Thousand).

Market Lot: Each market lot will consist 5 (five) bonds each with a Face Value of BDT 1,000 (One Thousand).

Interest Floor: The Interest Margin plus the Reference Rate will be set at 12.50% (the Interest Floor) at all times.

Interest Payment Dates: Interest on the “Bond” is to be paid semi-annually on the interest payment dates. The interest payment dates currently are determined as 15th October and 15th April during the tenor of the facility. Interest payment will be calculated on the actual number of days over a 360 day (year of twelve 30-day month) basis and will be payable semi-annually.
Interest Period: A 180 day period between an Interest Payment and the
date falling immediately prior to the next occurring Interest Payment Date.

Conversion Option: The Investor at the predetermined Principal Payment Dates of the Bond reserve the right and option to convert 25% of the Face Value of the Bond at a pre-determined Conversion Strike Price into the common shares of BRAC Bank Ltd. However, conversion is not mandatory.

Conversion Date: The Conversion Date is the same date will be 5th, 6th & 7th anniversary of Bond issuance date.

Example of Conversion and Redemption Features of Subordinated 25% Convertible Bond of BRAC Bank Limited
Assuming an investor holds a lot, i.e. 5 (Five) Subordinated Convertible Bond (SCB) of BRAC Bank Limited:

A. Determination of Predetermined Conversion Multiple
Last audited available NAV of BRAC Bank Limited as on December 31, 2009 = BDT 395.83
Last 6 months’ average price (October 1, 2009 – March 31, 2010) = BDT 679.06
Predetermined Conversion Multiple = Last 6 months’ average price/ Last available audited NAV
= 679.06/ 395.83
= 1.72

B. Determination of Conversion Strike Price
Conversion Strike Price in 2015 = Conversion Multiple × Available last audited NAV of BRAC Bank Limited (e.g. on December 31, 2014)