DFCC Bank’s Rs. 5 b Debenture Issue opens today

DFCC Bank recently announced its Debenture Issue to raise Rs. 5 b with an option to issue up to Rs. 7 b, carrying a tenor of three years. The Colombo Stock Exchange has approved the listing of these debt securities on the main board and the Issue opens to the public today.

Rated AA- by Fitch Ratings (Lanka) Ltd., this public Issue is attractively structured giving investors the opportunity to receive an annual rate of return of 10.625%.

Speaking on the Debenture Issue, DFCC Bank Senior Vice President Treasury and Resource Mobilisation Kapila Nanayakkara said: “The funds raised from this Issue will supplement the ongoing deposit mobilisation drive of the bank to support the lending and investment activities of DFCC during the normal course of business in 2016, whilst mitigating DFCC’s interest rate risk by reducing maturity mismatches. 



More specifically the bank will use the mobilised funds to support lending in the SME sector, personal financial services and project financing. In addition, it will supplement the diversification of the borrowing base of the bank. Retail and institutional investors will also benefit from having an alternative investment opportunity and the ability to earn a fixed rate of interest.”

A total of 50,000,000 Senior, Unsecured, Rated, Redeemable Debentures with a face value of Rs. 100 will be on offer with an option to issue a further 20,000,000 if the Issue is over-subscribed. The minimum subscription will be Rs. 10,000.

The Issue is structured by the Treasury and Resource Mobilisation Unit of DFCC Bank and jointly managed by Acuity Partners Ltd. and the People’s Bank Investment Banking Unit, while the placement agent is First Capital Ltd.. The Registrar to the Issue is SSP Corporate Services Ltd.