Kathmandu: Bangladesh Insurance Industry is all set to launch a new insurance product for risk coverage against Bond.
The Insurance Development and Regulatory Authority (IDRA) has prepared a ‘Bond Insurance Product’.The product has been submitted to the Bangladesh Securities and Exchange Commission (BSEC) for endorsement.
IDRA expects that such financial tool will attract bonds to the capital market. Currently, only two bonds are being traded on Dhaka Stock Exchange.
Bond insurance generally covers the repayment of the principal and all associated interest payments to bondholders in the event of default by the bond issuer. In this particular instance, the insurance coverage is only against any default on the payment of interest on bonds.
