First Capital Treasuries Rs. 500 m debenture oversubscribed
Thursday, 29 January 2015 00:28
First Capital Treasuries Ltd’s Rs. 500 million debenture issue was closed on Tuesday following an oversubscription on its official opening day.
It said the issue of 5 million rated five-year subordinated unsecured redeemable debentures at Rs. 100 each had received applications for over Rs. 500 million.
The basis of allotment and final details will be announced later.
The debenture was rated BBB+ by Lanka Rating Agency and carried a fixed interest rate of 9.50% p.a. payable annually (AER of 9.50%).
Managers to the issue were First Capital Ltd.
First Capital Treasuries hopes to utilise the funds raised through the Listed Debenture Issue to enhance the Long-term Funding Base of the company by way of Tier II capital and increase the capital adequacy. The company hopes to raise long-term funds (Listed, Rated, Unsecured and Subordinated Debts) which are qualified as ‘Tier II Capital’ in accordance with the Directives of the Central Bank of Sri Lanka and maintain a solid capital adequacy level over 20%.
The debenture issue also helps it to minimise the interest rate risk. The company intends to lock in a lower borrowing cost over the maturity of the said debts (i.e. five years) via the debenture issue offering an interest rate of 9.50% p.a.
First Capital Treasuries Ltd. is a licensed Primary Dealer in Government Securities appointed by the Central Bank. The ultimate parent company of First Capital Treasuries is Dunamis Capital Plc which holds an effective shareholding of 70.7%.