July 13, 2012 (LBO) – Sri Lanka’s Multi Finance Plc, a registered finance company said it had raised 350 million rupees from the sale of asset-backed securities to fund hire purchase loans. The tenor of the securitization was not mentioned by most vehicle purchase loans in Sri Lanka are for four years.
Sri Lanka’s interest rates have been rising over the past year.
Corrected volume Rs350mn “The core objective of this issue is to finance its new lease and hire purchase portfolio as part of the company’s growth strategy,” the company said in a stock exchange filing.
“The company firmly believes that this process provides effective medium term funding which in turn allows for very attractive medium term return for investors.”
Asset backed securities, typically involves the bundling and sale of cashflows (securitization) coming from loans already issued (leases or hire purchase contracts).