Commercial Credit Debenture Issue oversubscribed on opening day

Dec 07, 2015 (LBO) – Sri Lanka’s Commercial Credit and Finance PLC’s issue of up to 20 million rated, guaranteed, subordinated, redeemable five-year Debentures at a par value of 100 rupees each was oversubscribed soon after subscriptions were opened on Wednesday, the 3rd of December 2015, the company said in a media release.

Accordingly the company was able to raise up to the maximum amount of up to two billion rupees.

The debentures will be listed on the Colombo Stock Exchange. The issue will yield an annual effective rate of 10.67 percent for Type A debentures or 6 months Treasury Bill Rate + 1.5 percent payable semi-annually for Type B Debentures. The issue has rating of “[SL] A+ (SO) Rating with Stable Outlook” by ICRA Lanka Limited.

“The opening day oversubscription reflects the investor confidence in Commercial Credit and Finance PLC., and allows us to sustain our growth momentum into the coming year. We would like to thank our investors and all our stakeholders for the confidence placed in us.” Rajiv Casie Chitty, Chief Operating Officer of Commercial Credit and Finance PLC said.

The current debenture issue will further reinforce the Company’s Tier II capital base, with the funds being utilised to strengthen the asset base and to reduce the interest rate risk by reducing the maturity mismatch of assets and liabilities.

“The lending portfolio of the company has been expanding and the private credit growth has also been significantly increasing in the current year. Funds raised through this issue will diversify the sources of long term funding and will enable us to reduce the asset liability mismatch,” Chitty said.

The company would continue its focus on the SME and Microfinance sectors and play a major role in empowering the customer base to reach higher financial goals and higher living standards.

The company will also look at expanding its branch network across the island to serve a wider consumer base, the media release said.

Managers to the issue was Acuity Partners (Private) Limited.