DFCC goes for Rs. 7 b debenture issue

Tuesday, 1 March 2016 00:32 - - {{hitsCtrl.values.hits}}

DFCC Bank aims to raise Rs. 7 billion by way of a listed debenture issue which has received the preliminary approval from the Colombo Stock Exchange (CSE).

The Bank will be offering 50 million rated, senior, unsecured, redeemable debentures at an issue price of Rs. 100 each, with an option to issue up to a further 20 million of the said debentures in the event of an over subscription at the discretion of the Bank.

The official opening of the issue is slated for 10 March but the public can start subscribing from today. These three year debentures rated AA- by Fitch will carry 10.625% payable annually (AER 10.625%).

Funds raised through the Debenture offering will supplement the ongoing deposit mobilisation drive of the bank to support the lending and investment activities of DFCC as part of its normal course of business for the year ending 31.12.2016.

DFCC will also use these mobilised funds to support lending in the SME sector, Personal financial

Services and Project financing. Medium term Debentures Issue would enable DFCC to better manage its asset and liability maturity mismatches and interest rate sensitivity gaps.

The joint managers to the issue are Acuity Partners Ltd., and People’s Bank Investment Banking Unit. The relevant structuring partner is DFCC Bank and placement agent is First Capital.

DFCC’s total assets grew by 17% to Rs.247 billion as at December 31, 2015 from Rs.210.6 billion as at March 31, 2015. This included a credit portfolio growth of 18% to Rs.171 billion from Rs.144.9 billion. DFCC Bank’s net PAT as at December 31, 2015 was Rs.1.6 billion (group) down by 63% and Rs.1.07 billion (bank) which declined by 67% compared to FYE results at March 2015 where it was recorded at Rs.4.4 billion and Rs.3.24 billion, respectively.