The latest debenture issue of the National Development Bank (NDB) had drawn demand worth over Rs. 9 billion. NDB issued six million BASEL III compliant, Tier 2 listed, rated, unsecured, subordinated, redeemable debentures of Rs. 100 each with a non-viability conversion with an option to issue a further 20 million more at the discretion of the Bank in the event of an oversubscription of the initial issue.
The Issue was structured in two types of debentures, Types A and B, with tenors of five and seven years, nominal interest rates of 11.90% p.a. and 12.00% p.a. payable semi-annually, yielding AERs of 12.25% and 12.36% respectively.
When the issue closed on its official opening day itself on 16 November, it had received 149 applications requesting debentures worth Rs. 9.18 billion.
Type A option received 140 applications requesting debentures worth Rs. 9 billion and Type B drew nine applications requesting Rs. 116 million worth of debentures.
The debentures were rated at A- (lka) by Fitch Ratings Lanka Ltd. NDB Investment Bank Ltd., NDB’s subsidiary arm engaged in full-spectrum of investment banking services, acted as the Sole Managers and the Placement Agents to the Issue.
The oversubscription reaffirmed the strong confidence the investment fraternity has placed on the bank, attributable to the bank’s notable profile of a sustainably fast-growing, dynamic and technologically advanced institution within a robust corporate, social and environmental governance framework.
This oversubscription comes on the back of NDB successfully raising Rs. 9.5 billion in Tier I equity via a Rights Issue and Private Placement and securing $ 75 million in the form of a credit line funding from the Development Finance Corporation of the USA earlier this year.