The government is considering issuing a sovereign bond of up to $1 billion to the international capital market to diversify its funding sources.
American investment bank JP Morgan and Hong Kong-based consultancy firm Bridgeworks International will be commissioned to facilitate the bond issue and provide technical support.
The Cabinet Committee on Economic Affairs, chaired by Finance Minister Amir Khosru Mahmud Chowdhury, approved in-principle two separate proposals in this regard earlier this month.
The proposals have been sent to the prime minister for approval, after which formal contracts will be signed, The Daily Star learnt from finance ministry officials with knowledge of the matter.
The exact size of the bond will be finalised based on recommendations from these institutions, though initial discussions centre around an issue size of $500 million to $1 billion, they said.
The government is also exploring Japanese yen-denominated Samurai Bonds and Chinese yuan-denominated Panda Bonds alongside US dollar-based Eurobonds.
The development comes after the government in July formed an eight-member high-level inter-ministerial committee to assess the feasibility of issuing sovereign bonds.
The committee has representation from the Finance Division, the Economic Relations Division, the Bangladesh Bank and the Bangladesh Securities and Exchange Commission. It is led by Tanvir Shahriar Ghani, the prime minister’s special assistant on investment and capital market.
JP Morgan will act as the lead issue manager, global coordinator, bookrunner and sovereign rating advisor for the inaugural bond.
The government is implementing policy and institutional reforms to make public debt management more efficient, cost-effective and sustainable while keeping medium-term debt risks within acceptable limits, the finance ministry proposal reads.
Entering international capital markets aims to diversify funding sources, extend debt maturity profiles, mitigate refinancing and rollover risks, and build a strong foundation for long-term financing.
JP Morgan is being selected directly through the single-source selection method under the Public Procurement Act 2006 and Public Procurement Rules 2025 due to the specialised nature of sovereign bonds and the investment bank’s global experience.
Once appointed, JP Morgan will manage the selection of legal counsel and trustees, prepare the offering circular, organise investor roadshows, market the issue and determine the optimal timing and issue structure.
It will also advise the government on liaising with international credit rating agencies.
JP Morgan’s final commission will be negotiated between both parties.
As part of the preparations for the bond issue, JP Morgan on Friday hosted a breakfast for Prime Minister Tarique Rahman at the investment bank’s headquarters in New York.
The event was attended by executives from 15 institutional investors, including BlackRock, PIMCO, TPG, Jane Street, Macquarie, GoldenTree Asset Management and MetLife.
JPMorgan’s role in Bangladesh’s inaugural sovereign bond gives international investors a new reference point for Bangladesh and helps connect its capital market more closely with the global financial system, Tarique said at the breakfast meeting.
“We welcome Wall Street firms to invest in Bangladesh. And we want Bangladesh to become a strong platform, from which you can serve a much larger regional market. Our government’s objective is straightforward. More investment. More trade. More jobs. More technology. I invite you to invest with confidence and build for the long term. We are ready to work with you, listen to you and remove obstacles where we can,” he added.
The government is appointing Hong Kong-based Bridgeworks International to advise on capital market reforms and attract foreign investment for a one-year tenure.
Bridgeworks will also advise Bangladesh on sovereign bonds, investment funds, telecommunications, digital infrastructure, data centres, renewable energy, and mega-infrastructure projects.
The move comes as part of broader institutional reforms to reduce reliance on debt financing and boost equity-based foreign direct investment.
Parallel to international bond plans, efforts are underway to deepen the domestic capital market through corporate bonds, mutual funds, green bonds, sukuk and municipal bonds.
The high-level committee led by Ghani, who was based in Hong Kong before taking up the government role in April, is working to review the processes, with Bridgeworks brought in to align operations with international benchmarks.