Sri Lanka Telecom PLC’s (SLT) unsecured Rs.7 billion debenture issue, inclusive of two greenshoe options, was subscribed on the opening day (April 11), despite two other large debenture issues opening on the same day.
Acuity Partners Ltd. functioned as the financial advisor and manager to the issue.
SLT offered 50 million senior, unsecured, redeemable, rated 10-year debentures of Rs.100 each, with a greenshoe option to issue further 10 million debentures and with another greenshoe option to issue up to 10 million more debentures in the event of an oversubscription of each tranche.
The Type A debenture offers a 12.75 percent interest rate payable annually and Type B offered 12.75 percent payable semi-annually (AER of 13/16 percent). The debentures were rated AAA by Fitch.
According to stock market analysts, SLT’s is the largest issuance of 10-year debtnures by a Sri Lankan corporate and they said the 12.75 percent per annum coupon was priced lower than many bank or finance company debentures offering higher coupons for shorter tenures.
About Rs.5 billion of the debenture proceeds will be utilized to retire short-term maturing and high-interest paying debt. The remaining Rs.2 billion will be utilized to partly finance the required future capital expenditure.