Sampath Bank plans up to Rs.20 bn Tier 2 capital raise via debentures, green bonds

Sampath Bank said its board has approved a proposal to raise up to Rs. 20 billion (US$67 million) through the issuance of Basel III-compliant Tier 2 capital instruments, according to a stock market disclosure filed with the Colombo Stock Exchange.

The proposed fundraising will be carried out via listed, rated, unsecured and subordinated redeemable debentures and/or green or sustainability bonds with a non-viability conversion feature. The instruments may be issued in one or more tranches within two years of obtaining shareholder approval at an extraordinary general meeting, subject to regulatory clearances.

As part of the programme, the bank plans an initial issuance of up to Rs.10 billion, comprising up to 100 million instruments with a par value of Rs. 100 each. The first tranche is expected to have maturities of five and seven years.

Sampath Bank said details such as the structure of the issuance, coupon rates, interest payment frequency and the type of instruments to be issued will be disclosed prior to the opening of each tranche. The proposed issuances remain subject to shareholder and regulatory approvals and other conditions acceptable to the bank.