Seylan Bank to raise up to Rs.8bn via debentures

The director board of Seylan Bank PLC has resolved to raise up to Rs.8 billion through a debenture issue, the bank informed the Colombo bourse yesterday. To this end, Seylan plans to issue 50 million unsecured redeemable debentures priced at Rs.100 each with an option to issue further 30 million of the said debentures in the event of an oversubscription of the initial tranche. The proposed tenures of the issue are three years and four years from the date of allotment while the interest rate options/ coupons will be decided by the board prior to the opening of the issue,” the filing by the bank said.

An application seeking approval from the Colombo Stock Exchange to list the debt securities on the Main Board will be submitted in due course, the bank said. Currently there are five banks and three finance companies in the market raising as much as Rs.49 billion through debentures within a window of three months. The rush to raise funds appears to be a result of the still higher appetite for credit among Lankans despite relatively higher interest rates and the possible removal of a tax waiver currently in place on interest earned on listed corporate debt in the forthcoming budget.