AFC announces allotment for Rs. 2 b Social Bonds, proposes fresh Rs. 1 b High-Yield Bonds

Monday, 1 September 2025 05:08 - - {{hitsCtrl.values.hits}}

Announces allotment basis for 64 applications received for Social Bond issue
Total applications received worth nearly Rs. 2.5 b
Four-year Bonds get applications worth Rs. 1.7 b; five-year Bonds Rs. 797 m
15 m Bonds slotted for preferential investors
100% allotment to investors who applied for 200,000 Bonds or less
Announces separate proposal for Rs. 1 b High-Yield Bond issue

Alliance Finance Company PLC (AFC) recently announced the allotment basis for its successful Social Bond issue, which drew applications worth nearly Rs. 2.5 billion.

AFC successfully issued 20 million listed, rated, unsecured, senior, redeemable Social Bonds at a par value of Rs. 100 each. The company said it received applications for more than 24.7 million Social Bonds. Accordingly, the full issue of 20 million Bonds will be allotted as follows; a preferential allotment of 15 million Bonds to identified investors, in line with Section 6.7 of the Prospectus dated 7 August 2025, and a 100% allotment to investors who applied for 200,000 Bonds or less.

Applicants for more than 200,000 Bonds will receive 200,000 Bonds in full, plus 44.04% of the balance amount applied for, rounded to the nearest 100 Bonds, AFC said in a stock exchange filing yesterday.

The previous day, AFC announced the final figures in respect of the applications processed for its Rs. 2 billion Social Bond issue, which was oversubscribed and closed on the opening day, 21 August.

AFC received 64 applications worth nearly Rs. 2.47 billion, according to a filing with the Colombo Stock Exchange.

Subscriptions to the Type-A four-year Bonds, carrying a fixed coupon of 11.15% per annum, reached 16.76 million units worth Rs. 1.68 billion.

These came through 27 applications, including Rs. 1.43 billion via cheques and Real-Time Gross Settlement (RTGS) transfers (25 applications) and Rs. 250 million through bank guarantees (2 applications).

Type-B five-year Bonds, with a fixed coupon of 11.40% per annum, attracted 7.97 million units worth Rs. 797 million.

These were subscribed through 37 applications, comprising Rs. 647 million via cheques and RTGS transfers (36 applications) and Rs. 150 million via a single bank guarantee.

AFC said 75% of the proceeds will be used to support micro, small, and medium enterprises and rural entrepreneurs through value chain financing, while the remaining 25% will be directed to microfinance for women in underserved communities.

The basis of allotment will be announced to the Stock Exchange in due course, the company said.

Meanwhile, the company in a separate stock exchange filing yesterday (28) said that the Board of Directors at a meeting held on Wednesday resolved to issue, listed, rated, unsecured, subordinated High-Yield Bonds, subject to obtaining the necessary regulatory approvals.

The filing said: The Board has authorised an initial issue of 10 million (10,000,000) Bonds with an option to issue a further 5 million (5,000,000), each with a par value of Rs. 100 for a term of five years, amounting to Rs. 1 billion, with an option to issue up to a further Rs. 500 million at the discretion of the company. The interest rates will be determined closer to the finalisation of the issue, based on prevailing market conditions at that time.