DFCC Bank taps debt market for funds

August 30, 2006 (LBO) – Sri Lanka’s DFCC Bank plans to raise up to two billion rupees in debt capital to meet its long term credit expansion. The privately placed issue carries an AA-(lka) rating from Fitch Ratings Lanka with tenures ranging from five to 10 years.

The unsecured subordinated redeemable debenture issue will be listed on the Colombo Stock Exchange at a later date, officials said.

DFCC, which started off as a government owned development finance institution, also has a AA(lka) rating from Fitch for the bank’s long-term senior debt.

In 2003, the DFCC diversified itself by acquiring a small licensed commercial bank, which was renamed as DFCC Vardhana Bank. Business tycoon Harry Jayawardena and his Stassens Group through various subsidiaries and associate companies dominate DFCCs shareholder list. Of this, the Distilleries Group and Hatton National Bank own about 18.7 percent, the life and general funds of Distilleries’ subsidiary, Sri Lanka Insurance Corp, collectively hold a further 11.8 percent.

CATEGORY DURATION RATES

Type A

5 years 13.00%
Type B 7 years 13.25%
Type C 10-years 14.00
Type D 5-years 6-month weighted average treasury bill + 2.00%
Type E 5-years 6-month weighted average treasury bill + 1.00%
Type F 7-years 6-month weighted average treasury bill + 2.25%
Type G 7-years  6-month weighted average treasury bill + 1.25%
 

(Source :DFCC
Bank)