The Citizens Development Business Finance Plc (CDB) Rs. 2 billion debenture issue that concluded successfully had drawn 190 applications.
CDB offered 10 million subordinated, unsecured, listed, redeemable and rated five-year debentures of Rs. 100 each with an option to issue a further 10 million debentures in the event of an oversubscription of the original amount. There were two types of debentures on offer.
The biggest draw was for the Type B debenture (Fixed Coupon Rate of 14.20% p.a. payable Annually (AER: 14.20%)) which received 102 applications worth Rs. 1.18 billion, all of which saw payment made by cheques and RTGS. The Type A debentures (Fixed Coupon Rate of 13.75%p.a. payable Semi-annually (AER: 14.22%)) received 88 applications worth Rs. 1.19 billion with one application with payment by bank guarantee and the rest via cheques and RTGS.
The issue drew applications worth Rs. 2.38 billion. The debentures were rated BBB by ICRA Lanka Ltd.
The funds raised through the Debenture Issue will be utilised to finance expansion by increasing the lending portfolio of the company within 12 months from the Date of Allotment.
Funds will support the general business growth opportunities of the company; reduce the mismatch of maturity periods between assets and liabilities; and further improve the Capital Adequacy of the company’s balance sheet by strengthening its Tier II Capital, subject to the Central Bank of Sri Lanka’s approval. Such an increase in the Tier II capital will enable the company to significantly expand its lending portfolio in conformity with the Central Bank of Sri Lanka’s Capital Requirements. Capital Alliance Partners and CDB Corporate Finance Division were the joint managers to the issue.