DFCC closes debenture issue at Rs. 4.5 b

DFCC Bank has closed its latest listed debenture issue at Rs. 4.5 billion, reflecting under subscription both at initial level of Rs. 5 billion and secondary amount of Rs. 7 billion.

The bank said that the debenture issue drew 49 applications requesting for 45.23 million debentures worth Rs. 4.523 billion.

The majority (46 worth Rs. 4.3 billion) of the applications are for Type A debenture.

Following the response, DFCC decide to allot the debentures on the basis of 100% allotment to the debenture holders who subscribed for under both Type A and B.

The bank is issuing 50 million BASEL III compliant, Tier 2, Listed, Rated, Unsecured, Subordinated, and Redeemable debentures with a non-viability conversion at an issue price of Rs. 100 each with an option to issue up to a further 20 million of said debentures, at the discretion of the bank, in the event of an oversubscription of the initial issue.

The debentures were of five- and seven-year tenor, and included a non-viability clause and will qualify as regulatory Tier 2 capital for the bank. The bank plans to use the proceeds to strengthen its Tier 2 capital base and support its loan expansion.

Fitch Ratings assigned the debentures a National Long-Term Rating of ‘A-’.