Senkadagala Finance in Rs. 250 m debenture issue

Senkadagala Finance Company Ltd (SF) has announced the issue of Rs. 250 million debentures by way of a public offer. These debentures will be listed on the Colombo Stock Exchange, and offers a fixed rate investment option at 14% per annum or floating rate option at 2.75 percent above the three month Treasury Bill net rate (three month notes now trade at 9.22 percent). The floating rate note comes with a floor of 10 percent and a cap of 15 percent

While the period of investment is fixed for 4 years 60% of the capital portion of the debenture will be paid back in the third year. The repayment pattern has been structured in this manner to match the maturity profile of SFS lease and hire purchase portfolio.

The issue opens on the August 31 and closes on the September 20 unless oversubscribed before. An important feature of this instrument is that it would be the first debenture issue to be directly listed on the DEX trading platform of the Colombo Stock Exchange.

It is expected that this listing would enable these debentures to be bought or sold freely through stockbrokers thereby creating a secondary market for the debentures and creating an exit mechanism for investors.