Sri Lanka Seylan Bank to sell 5-year debentures

Dec 03, 2008 (LBO) – Sri Lanka’s Seylan Bank is seeking at least 400 million rupees through a 5-year debenture issue that offers annual interest rates as high as 21.5 percent with an option to raise a further 600 million rupees.

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Subscriptions for the 10 million unsecured subordinated redeemable debentures, which have been approved by the Colombo Stock Exchange for listing on the main board, open on December 10.

Seylan Bank said that in the event of the first 400 million rupees being oversubscribed it plans to issue three more tranches of 200 million rupees each.

The bank said investors have the option of monthly, quarterly or annual investment plans.

Its type A plan offers an annual interest rate of 20.5 percent payable monthly, giving an annual effective rate of 22.5 percent.

Type B offers an annual interest at 21.5 percent payable annually.

Seylan Bank also offers floating rates payable quarterly or annually at 2.5 percent above the three-month and one-year weighted average government Treasury Bill rate after tax. Sri Lanka has been grappling with high inflation and interest rates in recent years.

Inflation hit a record near 30 percent earlier this year but has now begun to fall after the central bank tightened monetary policy.