Nation Trust Bank’s Rs. 5 b debenture issue oversubscribed

The listed, rated, unsecured, subordinated, redeemable debenture issue of Nations Trust Bank PLC, with a tenure of five years, was successfully oversubscribed on the opening day.  

The bank having received a substantial amount of applications, decided to exercise the option of increasing the issue up to Rs. 5 b. The basis of allotment will be notified to the Colombo Stock Exchange once it is approved by the bank’s Board of Directors.

Accordingly, the bank will issue 50 million debentures, at a par value of Rs. 100 each and will be listed on Colombo Stock Exchange by way of an Offer for Subscription.  The issue is rated A-(lka) by Fitch Ratings Lanka Limited. The debentures in the denomination of Rs. 100 were offered in three variants, Type A with five year fixed interest rate of 12.65% p.a (AER 13.05%) payable semi-annually, Type B with five year fixed interest rate of 12.80% p.a (AER 12.80%) payable annually and Type C with five year floating interest rate of Six Month (Gross) Treasury Bill Rate + 1.50% p.a payable semi annually.“We thank our customers and investors for placing their confidence on the strength, stability and growth plans of Nations Trust Bank” said the Nation Trust Bank’s CEO/Director Renuka Fernando.

The bank intends utilising this debenture to broad base their investor profile, by providing an additional investment avenue with attractive returns while establishing an additional source of funds by tapping capital markets, away from the traditional deposit base.  Funds thus raised are expected to further improve the capital adequacy of the Bank’s Balance Sheet by increasing its Tier II capital base thus strengthening its total eligible capital.  The debenture issue was managed by Waldock Mackenzie Limited (WML), the Investment Banking arm of the group which is a fully owned subsidiary of Nations Trust Bank PLC. WML specialises in capital market product offerings with a track record of over ten years as a leading margin provider for equity trading business. Together with Waldock Mackenzie Limited, People’s Bank Investment Banking Unit and Capital Alliance Partners Limited acted as Placement Agents. Growing vigorously over the past decade, Nations Trust Bank (NTB) has consistently demonstrated a robust performance. The bank closed the first half of the year ending 30 June 2016 recording a post-tax profit of Rs. 1278 m.

By sustaining strategic growth prospects, the proposed debenture issue, offers not only a secure investment option, but also affords investors the opportunity to share in the long term accomplishments of Nations Trust Bank.