People's Merchant Bank raises Rs. 50 million for Ceylease

People's Merchant Bank Limited (PMBL) recently structured and placed lease backed trust certificates to the value of Rs 50 Mn, on behalf of Ceylease Financial Services Limited (CFSL). The entire issue was taken up by National Savings Bank (NSB), whilst Deutsche Bank AG acted as the Trustee to the issue.

These trust certificates are secured by a quality portfolio of leases and the tenure of these trust certificates ranged from 3 months to two years. The interest rate attached to the trust certificates was fixed to the 1 year gross Treasury bill rate. Monies raised through this placement of trust certificates will be utilised to further augment CFSL's fund base and to pursue its aggressive growth strategy. This is the fourth asset backed debt issue placed by PMBL for CFSL, having successfully completed three similar issues to the value of Rs 100 Mn, 60 Mn and 150 Mn previously.

CFSL has achieved consistent profit growth during the last few years and they recently obtained a BBB- (sri) national long rating, from Fitch Ratings Lanka Ltd, in respect of its long term, unsecured senior debt. A 50% subsidiary of Bank of Ceylon, CFSL's other share holders include the Brandix Group and Union Assurance Ltd. PMBL has featured prominently in debt market transactions, having structured and placed several securitisations, debenture issues and loan syndications for its clients.