Friday Nov 15, 2024
Friday Nov 15, 2024
Wednesday, 17 November 2021 00:19 - - {{hitsCtrl.values.hits}}
National Development Bank PLC’s Debenture Issue to raise Rs. 8 billion via Basel III compliant listed, rated, unsecured, subordinated and redeemable debentures was oversubscribed within hours of opening on the Colombo Stock Exchange yesterday.
The oversubscription reaffirmed the strong confidence the investment fraternity has placed on the bank, attributable to the bank’s notable profile of a sustainably fast-growing, dynamic and technologically-advanced institution within a robust corporate, social and environmental governance framework.
This oversubscription comes on the back of NDB successfully raising Rs. 9.5 b in Tier I equity via a Rights Issue and Private Placement and securing $ 75 m in the form of a credit line funding from the Development Finance Corporation of the USA earlier this year.
Commenting on the Debenture Issue, NDB’s Director and Group CEO Dimantha Seneviratne thanked the investors for partnering NDB in its mutual growth journeys. “As a responsible financier, we always strive to generate maximum value to all our stakeholders and this instance will not be different. We will channel the funds raised to a host of business segments, including SMEs, which we hope will provide them the necessary impetus in the recovery from effects of the pandemic,” he further noted.
The Debentures were issued with the objectives of improving and further strengthening the Capital Adequacy Ratios (CAR) in line with the Basel III guidelines and facilitating future expansion of business activities of the bank.
The issue was structured in two types of debentures, Types A and B, with tenors of five and seven years, nominal interest rates of 11.90% p.a. and 12% p.a. payable semi-annually, yielding AERs of 12.25% and 12.36% respectively. The initial issue comprised 60 million debentures at a par value of Rs. 100 to raise Rs. 6 b, with the option of raising a further Rs. 2 b, in the event of an oversubscription. The debentures issued carry a non-viability conversion clause as per Basel III guidelines.
The bank also obtained formal approval from the Central Bank of Sri Lanka towards including the debenture proceeds under Tier II capital of the bank. The debentures were rated at A- (lka) by Fitch Ratings Lanka Ltd. NDB Investment Bank Ltd., NDB’s subsidiary arm, engaged in full-spectrum of investment banking services acted as the Sole Managers and the Placement Agents to the Issue.
NDB has been in top form of performance through the multiple-challenges brought in by the pandemic. Support to customers and the wider economy has been a key priority for the bank. Financial and advisory proposition to customers such as ‘NDB Jayagamu Sri Lanka’ is a key example.
Whilst doing so, the bank has also been meticulously pursuing its five-year strategy, enabling it to achieve healthy financial results and maintain an equilibrium in performance across other multiple aspects. NDB’s digital drive continue with many industry first solutions, as does its contribution towards empowering the women’s market segment through ‘NDB Araliya’ and ‘Sri Lanka Vanithabhimana’.
