Three times demand for Rs. 1.4 b Softlogic Finance debenture

Monday, 25 August 2014 00:00 - - {{hitsCtrl.values.hits}}

Softlogic Finance Plc’s Rs. 1.4 billion listed debenture issue had been oversubscribed by over three times. When the issue closed on its official opening day on Friday, it had received 4.374 billion worth of applications. Exact final details will be released shortly.

The company offered AAA rated 14 million redeemable, guaranteed debentures to the public at a face value of Rs. 100 each. The debenture issue of Softlogic Finance was made in collaboration with GuarantCo who have guaranteed the instrument that carries a Barclays Bank guarantee as part of GuarantCo’s structure. The five year issue (2014/2019) offered attractive fixed and floating interest rates payable quarterly. The two options include; Option A –a fixed interest rate of 10% payable quarterly with an Annual Effective Rate of 10.38% or Option B – based on a floating interest rate of three months net treasury bill + 1.50 p.a., paid quarterly. The transaction was viewed by many as a groundbreaking event, not only as a result of the AAA rating given to the issue, but also due to it paving the way towards more foreign participation in providing alternative solutions to developing the debt capital market in the country. GuarantCo is owned by the PIDG members through the PIDG Trust and, in the case of DGIS, through FMO. The GuarantCo concept came from the Private Infrastructure Development Group (“PIDG”) which is a multi-donor, member-managed organisation. Softlogic Finance has specialist knowledge and expertise in the SME sector, and this funding line will be utilised to develop relationships with customers who require financial assistance, to build their businesses and improve their livelihoods. The company is a Registered Finance Company under Finance Business Act No. 42 of 2011, as well as being a Specialised Leasing Company, licensed by the Central Bank of Sri Lanka under the Finance Leasing Act No. 56 of 2000. The principle lines of businesses include leasing and hire purchase, fixed deposits and savings, personal loans, business loans, gold loans and SME loans.