Acuity Partners


Seylan Bank’s listed debenture issue worth Rs. 10 billion was oversubscribed on its official opening day which was yesterday.


The initial issue was 50 million Basel III compliant tier 2, listed, rated unsecured subordinated redeemable five and seven year debentures with a non-viability conversion at Rs. 100 each with an option to issue 30 million said debentures in the event of oversubscription and a further option to issue another 20 million debentures of the same on oversubscription.


Seylan Bank said it had received applications for over 100 million debentures and accordingly the issue was oversubscribed and closed at 4:30 p.m. yesterday. The debentures were rated BBB (lka) by Fitch Ratings Lanka Ltd.


Joint managers to the issue were CAL and Acuity.


The issue offered four types of interest rates. Type A: five year tenure at 13.25% annual interest fixed (AER 13.25%); Type B: five year tenure at 12.60% fixed interest payable quarterly (AER 13.21%), Type C: seven year tenure at 13.50% fixed annual interest rate (AER 13.50%) and Type D: seven year tenure at 13.05% fixed interest rate payable semi-annually (AER 13.48%).


The primary objectives of the issue of the Debentures were (1) to strengthen the Tier 2 Capital base of the Bank as per BASEL III requirements by the issue of subordinated debentures; (2) Grow the lending portfolio, especially in segments such as Small and Medium Enterprises (SME) and Export oriented industries and (3) Reduce Maturity gaps in the Assets and Liabilities of the Bank


Source: DailyFT