Seylan Bank scales down listed debt, raising Rs. 6 b from Rs. 10 b previously

• 5-year BASEL III compliant instrument’s Non-Viability Conversion to be shares instead of subordinated debt as per original move

Seylan Bank PLC has decided to go ahead with the previously announced listed BASEL III compliant debenture issue though with few changes. 

Originally Seylan in July last year announced a listed debenture worth Rs. 10 billion upon over subscription of Rs. 5 billion initially, Rs. 3 billion thereafter and Rs. 2 billion finally. It was to be via senior unsecured listed rated redeemable debentures and BASEL III compliant, Tier II, listed, rated, unsecured, subordinated redeemable debentures with a Non-Viability Conversion (to be issued as subordinated debt of the Bank). Having obtained shareholder approval, the Bank in November announced to defer the move considering the prevailing market conditions subject to review in the first quarter of 2021. 

The Seylan Board last week passed a resolution to proceed with the issue subject to certain changes to the type and quantum of debentures.

It has been resolved now to raise only Rs. 6 billion by way of a public issue offering to qualified investors 60 million BASEL III compliant, Tier 2, listed, rated, unsecured, subordinated, redeemable debentures with a feature of Non-Viability Conversion to ordinary voting shares. The board has decided not to proceed with an offer of senior unsecured listed rated redeemable debentures. 

It is proposed to initially raise Rs. 5 billion (50 million debentures at Rs. 100 each) with an option to issue a further 10 million debentures to raise Rs. 1 billion. 

The maturity period of debentures will be five years whilst the interest rates as determined by the Board will be notified prior to the opening of the issue.