MBSL proposes two listed debenture issues worth Rs. 2 b in New Year

Merchant Bank of Sri Lanka PLC is raising Rs. 2 billion this month through a listed debenture issue and Commercial Credit and Finance PLC will raise up to Rs. 500 million by a listed debenture issue.

Both are offered by MBSL considering the recent budget incentives -interest income earned from investing in bonds and debentures listed on the Colombo Stock Exchange to be exempted from withholding tax and income tax.

The Commercial Credit and Finance PLC debenture will open on 23 January 2013. The money raised from this issue will be utilised to improve the Tier 2 and to improve strategic developments. MBSL’s debenture will support its business expansion and settlement of short term borrowings.

For both issues, Corporate Advisory and Capital Markets Division of Merchant Bank of Sri Lanka PLC acts as the Managers and Registrars.

Last year MBSL raised over Rs. 1.7 billion through debenture issues, for Alliance Finance Company PLC and Bank of Ceylon.  In 2012, Alliance Finance Company raised Rs. 1 billion through its debenture issue which was opened in June 2012, and Bank of Ceylon, raised Rs. 6 billion through unsecured subordinated redeemable debentures for the purpose of enhancing the capital adequacy ratio and single borrower limit and to minimise the risk and gap exposure in the bank’s assets/liability portfolios.

MBSL supported Bank of Ceylon by raising Rs. 700 million for its parent’s debenture.