DFCC’s Rs. 5 b debentures snapped up

Friday, 8 August 2014 00:18 - - {{hitsCtrl.values.hits}}

DFCC Bank’s Rs. 5 billion debenture issue yesterday closed on its official opening day itself following an oversubscription. The bank said it has received applications for over Rs. 5 billion and the issue closed yesterday whilst the basis of allotment will be notified in due course. The issue involved 30 million senior, unsecured, redeemable, rated debentures of Rs. 100 each with an option issue a further 20 million debentures in the event of an oversubscription of the original amount. Rated AA- by Fitch Ratings, this public issue was attractively structured giving investors the opportunity to select between three options for receiving interest: 8.50% payable annually; 8.33% payable semi annually and 8.24% payable quarterly. The funds raised from this Issue will be utilised for the medium to long term lending activities of the bank, whilst mitigating DFCC’s interest rate risk by reducing maturity mismatches. In addition it will supplement the diversification of the borrowing base and further strengthen the SME loan portfolio through the ability to offer fixed rates of interest. DFCC said the decision to go public with this Issue was to provide retail and institutional investors with an alternative investment opportunity to earn a fixed rate of interest at their chosen frequency of payment. The issue was structured by the Long Term Funding and Capital Markets Division of the bank and managed by Capital Alliance Partners Ltd., while the Registrar to the issue is SSP Corporate Services Ltd.

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