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Siyapatha Finance announces Rs. 500 m debenture issue

Comments / 504 Views / Wednesday, 17 December 2014 00:00

Siyapatha Finance, the finance and leasing arm of Sampath Bank PLC has announced the issue of 5,000,000 listed, unsecured, redeemable and rated debentures at a par value of Rs. 100 each, amounting to Rs. 500 million. The debenture issue will open on 18 December and applications can be collected from NDBIB, Registrar to the issue, Sampath Bank branches and the member firms/trading members of the Colombo Stock Exchange. The minimum subscription is Rs. 10,000 or 100 debentures and applications in excess of the minimum subscription should be in multiples of Rs. 10,000 or 100 debentures. The company reserves the right to issue a further 5,000,000 debentures, totalling up to a maximum of 10,000,000 debentures worth Rs. 1 billion in the event of an oversubscription. The debentures will mature in December 2019. The five year (60 month) debenture offers a fixed interest rate of 8.90% per annum, payable annually. More details can be found in the prospectus. The Managers of the issue are NDB Investment Bank Ltd. Fitch Ratings Lanka has assigned a national long term rating of A-(lka) to these debentures. Chairman Channa Palansuriya stated that one of the objectives of the Issue is for the company to “use the entirety of the funds raised through this Issue to expand and strengthen its capital base”. He added that the proposed issue would reinforce the company’s Tier II capital, and facilitate further operational and asset base expansion. “The flow of these debenture funds which carry a fixed rate of interest would cushion off the effects of any interest rate volatility expected in the future,” said Siyapatha Finance Ltd. Chief Executive Officer Roshan Nanayakkara. By gaining access to additional sources of funds from non-deposit sources, Siyapatha Finance believes that it will help to open up capital market funding for the company and provide access to a wider investor base. The Chairman pointed out that the company’s ratings “reflect our high credit quality and stability and we are confident that this attractive debenture issue will be received with enthusiasm by investors looking for a long term, secure investment with a sustainable business partner”.

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