Seylan Bank’s 3 billion debenture issue was opened on 5th July 2016 and was successfully closed with an overwhelming response on the opening day itself, indicating strong investor confidence.
The initial tranche of Rs. 3 billion, ‘BBB+’ rated, listed, unsecured subordinate redeemable debentures were issued. Applications over the value of Rs. 5 billion were received thereafter, the second tranche of Rs. 2 Billion worth debentures were issued, which was successfully oversubscribed. Funds raised via this debenture issue will be utilized by Seylan Bank to increase the lending portfolio, strengthen the funding mix, minimize the interest rate risk and the gap exposure in the bank’s asset/liability portfolio, reduce maturity gaps in the balance sheet, improve the capital adequacy levels and strengthen its Tier II capital.
The debenture issue follows the wake of a very successful year for Seylan Bank. The bank recording a strong quarterly performance with Profits After Income Tax reaching Rs. 720 million for the three months ended 31 March, a 4 percent increase over the Rs. 691 million reported in the corresponding period of 2015. The bank reported a net credit growth of 4.27 percent, with net advances growing from Rs. 193,103 million to Rs. 201,350 million during Q1 2016. During the same period, the bank grew its deposit base from Rs. 224,525 million to
Rs. 225,445 million.
Commenting on the successful execution of the debenture issue, Kapila Ariyaratne, Director/CEO of Seylan Bank said, “We are pleased with the overwhelming response to this debenture and view this as a reflection of the investor confidence in Seylan Bank. The success of this debenture will help the bank to forge ahead with its ambitious growth plans which are eventually aimed at benefitting all our stakeholders. The funds will also strengthen our Tier II capital base and assist us to achieve significant milestones we have earmarked for the bank to achieve in the near future.”
People’s Bank Investment Banking Unit and Capital Alliance Partners Ltd were the Joint Managers to the issue, while Bank of Ceylon acted as the Trustee. SSP Corporate Services (Pvt) Ltd was the Registrars to the issue and Seylan Bank itself acted as the Bankers and Lawyers to the issue.