Singer debenture issue at 14.50% oversubscribed

Singer (Sri Lanka) PLC’s three-year listed unsecured redeemable debenture issue which opened yesterday was oversubscribed almost immediately and was subsequently closed in the early hours of the opening day itself.

The initial issue was aimed at raising Rs. 1,000 million, with an option to increase this amount by a further Rs. 500 million, at the discretion of Singer, in the event of an oversubscription.

In light of the keen interest of investors in the initial issue, and its oversubscription, Singer has decided to exercise this green shoe option by raising up to Rs. 1,500 million.

Given an A(lka) rating by Fitch Ratings (Lanka), the debentures were issued at a fixed interest rate of 14.50% p.a. – the lowest interest rate out of all debentures issued to date in 2013. A company spokesman noted: “It was an achievement to get the issue oversubscribed at a lower interest rate of 14.50% p.a. when other similar rated issues were raised at much higher interest rates in the recent past.”

With this issue, Singer intends to lower its cost of working capital and to shift the emphasis from short-term to long-term funding in order to restructure its balance sheet positioning. Indeed, the issue will have a positive impact on the company’s P&L statement.

NDB Investment Bank Ltd. acted as Financial Advisors and Managers to the issue while Commercial Bank of Ceylon PLC acted as the Bankers to the issue. Deutsche Bank AG, Colombo Branch is the Trustee to the issue. Other parties to the transaction include Nithya Partners, legal counsel to the issue, and Business Intelligence Ltd., the Registrars to the issue.

The success of Singer’s issue is a reflection of the trust that investors in particular, and Sri Lankans in general, have in the company. As the country’s leading consumer durables retailer, Singer leverages the island’s most extensive retail network to give its customers access to the world’s best brands, products and services.