Seylan’s Rs. 7 b debenture issue opens today

Seylan Bank’s Rs. 7 billion debenture issue to qualified investors will have its official opening today.

The Bank is issuing 50 million fully paid, BASEL III Compliant Tier 2 Listed Rated Unsecured Subordinated Redeemable Debentures with a Non-Viability Conversion at a par value of Rs. 100 each with an option to issue up to a further 20 million of such Debentures in the event of an oversubscription of the initial tranche at the discretion of the Bank. The tenure is five years.

The debentures are of two types. Type A offers a 28% interest rate per annum (AER of 28%) payable annually and Type B offers 25% interest rate payable quarterly (AER of 27.44%).



The debentures have been assigned ‘BBB (lka)’/Rating Watch Negative (RWN) by Fitch Ratings whilst Seylan has been assigned A-(lka)’/RWN by Fitch.

The primary objectives of the issue of the Debentures are to strengthen the Tier 2 Capital base of the Bank as per BASEL III requirements by the issue of subordinated debentures, and grow the lending portfolio, especially in segments such as Small and Medium Enterprises (SME) and Export oriented industries. It also aims to reduce the maturity gaps in the assets and liabilities of the Bank.

The latest debenture is part of Seylan Bank’s plans to raise Rs. 12 billion via multiple issues until 31 December. The size, tenure/maturity period (minimum five years), coupon rate/s, frequency of coupon/s etc., as determined by the Board will be notified prior to the opening of each issue.