MBSL debenture issue of Rs 2 bn opening on March 20

Merchant Bank of Sri Lanka PLC (MBSL), a subsidiary of Bank of Ceylon having over 31 years of experience in the financial sector, registered Finance Leasing Establishment under the Finance Leasing Act No 56 of 2000 (as amended) and a registered Market Intermediary under the categories of Margin Provider, Underwriter and Investment Manager in terms of the Securities and Exchange Commission of Sri Lanka Act No. 36 of 1987 (as amended) is planning to raise Rs two billion via listed debentures.

The issue comes with an option to increase the sum up to Rs two billion in the event of an over subscription of the initial Rs one billion or ten million (10,000,000) debentures.

Each having the value of Rs 100, these debentures will provide a fixed coupon rate of 16.50% to 17.50% per annum varying from 4 to 5 years resulting in an Annual Effective rate of 17.25%. to 17.81%.

The investors have an option to get a coupon payment monthly, quarterly and annually depend on the type of debenture they wish to invest. Ram Rating (Lanka) Ltd has assigned a Long Term Rating of AA to these debentures. The money raised from the issue will be utilized to raise long term funds required for increasing the lending portfolio and for the settlement of short term borrowings of the Company.

Net interest income was Rs 782.9 million against Rs 790.06 million a year ago. Operating profit for the period was Rs104.08 million or Rs 0.77 basic earnings per share.

During the year 2012 the company had optimized the country’s economic benefits and it helped to increase the company’s Total Assets value up to Rs 12.09 billion and it was a growth of 21.7% compared to the year 2011 Value of Rs 9.93 billion and Group’s total assets increased to Rs 22.52 billion. It was a growth of 17.1% compared to the year 2011 Value of Rs 19.23 billion.

Investment banking division of Merchant Bank of Sri Lanka PLC the Corporate Advisory and Capital Markets Division is the Managers and Registrars to this Debenture Issue, being the pioneers in managers and registrars functions for listed and unlisted debentures, have carried out many successful listed and unlisted debentures in recent past.