National Development Bank PLC, Sri Lanka’s fourth largest listed bank, successfully raised Rs. 6.5 billion through a five-year Basel III complaint, Tier II listed, rated, unsecured, subordinated, redeemable debentures with a non-viability conversion at an issue price of Rs. 100 each, via an initial public offering at the Colombo Stock Exchange yesterday. The issue was oversubscribed within hours from opening. 

The issue was to raise Rs. 5 billion initially with an option to raise up to a further Rs. 1.5 billion, at the discretion of the bank, in the event of an oversubscription.

Commenting on the issuance, the bank’s Director/Group Chief Executive Officer Dimantha Seneviratne said that the oversubscription of the bank’s debenture issuance was a reflection of the strong confidence that the public and the investors have placed in the bank, given the bank’s superior financial performance, robust governance framework, stability and trust proven over four decades. 

The issuance took place at a critical juncture in the post COVID-19 economic revival of the country. It offered investors a reliable investment option with an optimum rate of return amidst a very low interest rate environment and also provided impetus to capital market activities, he further stated.

The debentures offered 9.5% p.a payable annually and carry a tenure of five years, maturing in 2025. The debentures are rated at A-(lka) by Fitch Ratings Lanka Ltd.

The proceeds raised via the Issuance will improve and further strengthen the capital adequacy ratio in line with the Basel III guidelines and facilitate future expansion of business activities of the bank. 

The Managers to the issuance was NDB Investment Bank Ltd., a subsidiary company within the NDB Group.

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