NTB to raise up to Rs.15bn via Basel III Tier 2 debenture issue

Nations Trust Bank PLC said it will raise up to Rs.15 billion through a listed Basel III-compliant Tier 2 debenture issue.

The Colombo Stock Exchange (CSE) has granted in-principle approval for the listing of the issue, which comprises unsecured, subordinated, redeemable debentures carrying a non-viability conversion feature, according to a market filing.

The bank will initially offer up to 100 million debentures at a par value of Rs.100 each, raising up to Rs.10 billion. It has the option to issue a further 50 million debentures if the initial tranche is oversubscribed, taking the total issue size to Rs.15 billion.The subscription list will open on 19 June.

The issue offers three fixed-rate options. A five-year debenture will carry an annual interest rate of 13.75 percent, while seven-year and 10-year instruments will offer 13.85 percent and 13.95 percent, respectively. Interest will be paid annually.

The fund raising comes as banks seek to strengthen capital buffers under Basel III regulations while positioning balance sheets for a recovery in credit demand. Private sector credit growth has accelerated in recent months as economic activity improves, prompting banks to secure longer-term funding and capital to support expansion.

Tier 2 instruments form part of a bank’s regulatory capital and are designed to absorb losses in periods of financial stress, helping institutions maintain capital adequacy requirements set by the Central Bank of Sri Lanka.

Capital Alliance Partners Limited is the manager to the issue, while SSP Corporate Services (Private) Limited will serve as registrar.