36 applicants snap up SLT Rs. 7 b debenture

Sri Lanka Telecom’s (SLT) Rs. 7 billion debenture issue has been snapped up by 36 applications.

SLT offered 50 million senior, unsecured, redeemable, rated 10-year debentures of Rs. 100 each with a green shoe option to issue a further 10 million debentures and a further green shoe 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% annually payable interest rate, and Type-B offers a 12.75% semi-annually payable interest rate (AER of 13/16%). The debentures have been rated AAA by Fitch.

Debenture Type B drew 30 applications worth Rs. 5.3 billion with 29 of those with payments by cheques and RTGS. One application with payment made by bank guarantee was worth Rs. 1 billion. There were six applications for Type A debentures worth Rs. 2.07 billion. The full demand was for Rs. 7.386 billion worth of debentures.

It was the largest issuance of 10-year debentures by a corporate and was the only AAA-rated senior unsecured debenture issue. The only previous unsecured AAA-rated corporate debenture was also by SLT. Acuity Partners Ltd. was the managers of the issue.

SLT’s debenture proceeds will be used by the issuer to retire short-term debt (Rs. 5 billion) and to fund planned capital expenditure (Rs. 2 billion).