Philanthropy & CSR: BRAC, the world’s largest nonprofit, received approval from its country’s stock market regulator, the Bangladesh Securities and Exchange Commission (BSEC), to raise BDT 1,350 crore (USD 162 million) by issuing zero-coupon bonds.
As its name suggests, a zero-coupon bond is a debt instrument that does not pay interest. Instead, it is issued at a deep discount to its face value. At maturity, the bond is redeemed for its full face value thereby yielding a profit (return) to its investors.
BRAC’s bond is unsecured, non-convertible, and fully redeemable, and its tenure is one and half years to five years. Corporate investors and high-net-worth individuals are eligible to buy the bonds through private placement.
BRAC will use the proceeds to expand its microfinance activities.
Read this article to learn about how nonprofits can unlock new forms of capital.