Sanasa Development Bank nets over Rs. 4 b in debenture issue

Sanasa Development Bank Plc said yesterday that its listed debenture issue has drawn subscriptions worth over Rs. 4 billion thereby successfully completing both tranches.

The bank offered 20 million rated, guaranteed, redeemable debentures at 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. On Monday it said applications for over Rs. 2 billion were received and the initial offer oversubscribed. It also said the issue will be closed yesterday as per prospectus and applications received until 4.30p.m. will be accepted.

Yesterday it said “we have received applications for over Rs. 4 billion” and accordingly the total issue has been oversubscribed. 

The basis of allotment will be notified in due course. The issue contained four types of debentures. Type A was three year debentures with a fixed 9.6% interest rate per annum (Annual Effective Rate of 9.83%) payable semi annually and Type B was five year debentures with fixed 10% interest rate (AER of 10.25%) payable semi annually. These debentures were guaranteed by Sampath Bank Plc.

Type C was three year debentures with fixed 9.9% interest rate (AER of 10.15%) payable semi annually and Type D was five year debentures with a fixed rate of 10.30% (AER of 10.57%) payable semi annually. These debentures were guaranteed by Seylan Bank Plc.

The objectives of the debenture issue were to raise medium term funds to manage assets and liability mismatch, to minimise the interest rate risk and to finance the budgeted lending portfolio (approximately 90% as loans and the balance as leasing) as well as to minimise the mismatch in funding exposure.