MBSL to issue 2017’s first listed debentures to raise Rs. 2 b

Merchant Bank of Sri Lanka & Finance PLC (MBSL), a subsidiary of state banking giant Bank of Ceylon, is raising Rs. 2 billion via a five-year listed debenture issue, first for 2017.

MBSL will offer 10 million unsecured subordinated redeemable debentures of Rs. 100 each and a further 10 million debentures will be issued in the event of an oversubscription of the first tranche. 

The debenture has been rated ‘A-’ by ICRA Lanka Ltd.Issue will open on 20 April and prospectus and application forms are available with all stockbrokers, company website and CSE website.

Type A debenture will be offered with a coupon rate and AER of 15%, while Type B debenture will have a coupon rate of 14.5% and an AER 15.03% payable on biannualbasis. Finally, Type C debentures carrying interest at a floating rate calculated based on the six months gross Treasury bill rate plus 200 basis points subject to a cap of 15.5% per annum and a floor of 10% per annum payable biannually. 

As per the unaudited interim financials ofDecember 2016, MBSL recorded highest income of Rs. 2.03 billion which is a 10% increase over the last year. Profit before tax for the year under review was Rs. 240 m and profit after tax recorded Rs. 176 m, which is an increase of 293% from the previous year.  

MBSL was recognised as one of the ‘Best Employer Brands in Sri Lanka in 2016,’ by the World Human Resource Development Congress. This award has reinforced MBSL’s success in employee integration via the merger process. MBSL also was crowned the ‘Emerging Financial Institute of the Year,’ at the Middle East Asia Leadership Summit Awards in February 2017, in February this year ahead of MBSL’s 35thanniversary.

The brand ‘MBSL’ is ranked at 58th (2016 rank: 76th) and boasts a brand value of Rs. 774 m by ‘Brand Finance Lanka – Brands Annual 2017’ through an independent and unbiased analysis.