MBSL completes two Debenture Issues worth Rs. 2.5 bn

Investment banking division of Merchant Bank of Sri Lanka PLC the Corporate Advisory and Capital Markets Division is in the forefront of Debenture Issue successfully completed two listed debenture issues in first quarter of year 2013.

Being the pioneers in Managers and Registrars functions Corporate Advisory and Capital Markets division raised a sum of Rupees five Hundred Million (LKR 500,000,000) through its five year Listed Debenture Issue for Commercial credit and Finance PLC.

It was, one of the first listed debenture issues in year 2013 capitalized on the National budget incentive - the interest income from investments made on or after January 1, 2013 in corporate debt securities Listed on the Colombo Stock Exchange will be exempt from income tax including the deduction of Withholding Tax (WHT).

In March 2013 Corporate Advisory and Capital Markets Division raised LKR.2Billion via listed debentures for MBSL as a Managers and Registrars to the Debenture Issue. The issue came 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 debenture had the value of Rs. 100/- and Ram Rating (Lanka) Ltd has assigned a Long Term Rating of AA- to these debentures.

This debenture issue was oversubscribed on the opening date of 20 March 28, 2013 and totally got the applications for the value of Rs. 2,088,140,000. As a result of oversubscription Board of Directors of MBSL has decided to allot the debentures in Pro-Rata basis and decided to give full allotment to Type B & D and to Type A & C on a Pro-Rata basis (93.86%) since value of applications received for Type A & C counts to Rs. 1.436 billion and for Type B & D counts to LKR. 651 million. This will enable a fair basis of allocation considering the number of applications received for the issue.

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.