Sampath Bank debenture issue draws Rs. 7.4 b in demand

Wednesday, 18 November 2015 00:00 - - {{hitsCtrl.values.hits}}

Sampath Bank PLC’s second debenture issue worth Rs.7 billion was oversubscribed over its initial issue and closed on the opening day with a strong expression of investor confidence.

The bank yesterday disclosed that the issue drew 151 applications requesting debentures worth Rs.7.4 billion.

The offer was for 50 million listed, rated, unsecured, subordinated, redeemable debentures of Rs.100 each with an option to issue up to a further 20 million debentures in the event of an oversubscription of the original amount.

Type A debentures had received 138 applications via cheques and RTGS requesting debentures worth Rs.5.57 billion and two applications via bank guarantee worth Rs.1.55 billion, bringing the total under this category to Rs.7.13 billion. Type B debentures only drew 11 applications via bank guarantees worth Rs.2.58 billion.

As this exceeded the initial 50 million debentures for over Rs. 5 billion, the bank decided to exercise the option to accept a further 20 million debentures issuing a total of 70 million debentures. The issue closed on the opening date (12 November) itself.

Type A is five-year tenure and carries 9.90% interest rate per annum payable semi annually with an annual effective rate (AER) of 10.15%. Type B is five-year tenure and carries six months t-bill rate plus 1.25% interest rate per annum. The issue was rated ‘A (lka)’ by Fitch Ratings.

Sampath Bank’s last listed debenture issue was in November 2013. It raised Rs. 5 billion via a five-year unsecured subordinated redeemable debentures offering 13% fixed rate payable semi annually and 13.40% fixed rate payable annually. That issue drew Rs. 14.5 billion worth of applications.

Sampath Bank’s value addition to the economy

Further to the press release by Sampath Bank for the third quarter, the bank wishes to state that total financial value addition by the bank for the nine month period ended 30 September 2015 amounted to Rs. 14.6 b.

The bank has set aside/paid Rs. 3.8 b [26%] as taxes to the Government which includes Income Tax, Financial Services VAT, NBT, etc.

The total contribution to the employees’ salaries and other benefits amounted to Rs. 4.4 b [30%] of the total value addition. As at this date, the bank has retained Rs. 5.3 b in reserves which will be utilised in future to finance the expansion of the bank and distribution of dividends to shareholders.

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