The director board of Seylan Bank PLC has decided to raise Rs.5 billion through Basel III compliant debentures, the bank said in a stock exchange filing on Friday.
Accordingly, Seylan plans to issue 50 million rated, unsecured, subordinated redeemable Basel III compliant debentures at Rs.100 each, subject to the debentures being listed on the Colombo Stock Exchange.
“It has been proposed that the tenure of the debentures would be five years from the date of allotment while the interest rate option/coupon will be decided by the board prior to the opening of the issue,” the filing said.
The bank said an application seeking approval from the Colombo Stock Exchange to list the said debentures on the Main Board would be submitted in due course.
Seylan Bank raised little over Rs.6.2 billion through another debenture issue in March this year to fund its loan growth and to meet the elevated capital ratios under the new BASEL III rules.
Sri Lankan banks are seen racing to issue BASEL III complaint Tier II debt during 2018 as the banks face a steeper increase in minimum capital ratios from January 2019.