Safe Bet

Mercantile Leasing Ltd has raised Rs. 102.2 mn from the market by securitising its future cash flows.
The four-year paper was priced at two percent above the one-year treasury bill rate and snapped up by a fund management company.rn

rnThe issue was structured and placed jointly by Capital Alliance Ltd and National Wealth Corp.rn

rnDeutsche Bank AG, Colombo Branch have been appointed as the Trustee to manage the Trust. rn

rnSecuritisation of Lease Receivables is a process of packaging a pool of lease receivables with an appropriate level of credit enhancement and the redistribution of these packages to the investors. rn

rnThe main objective of this securitisation is to enable the Originator, MLL to raise additional long-term funds by converting its lease receivables into liquid & negotiable Instruments. rn

rnThis was the seventh such issue by MLL, which allows the firm to diversify its funding sources, lower its cost of funding, and improve its asset/liability match. rn