Commercial Bank of Ceylon bought up Rs. 250 mn worth of securitised paper locking returns up to four years

L-R: Kishan Nadarajah – Principal, BOV Capital, Chalinda Abeykoon – CEO, Lanka Angel Network, & Aloka Gunasekara – Program Manager, StartupX Foundry

Commercial Bank of Ceylon bought up Rs. 250 mn worth of securitised paper locking returns up to four years. Commercial Bank of Ceylon bought up Rs. 250 mn worth of securitised paper locking returns up to four years. Ceylon Electricity Board unions staged a walkout on Friday protesting against a Cabinet paper passed two days ago, they say was shoved through the backdoor. People’s Leasing Co. (PLC) issued the lease-backed securities to feed a growing appetite for leases and to diversify funding sources.

People’s Merchant Bank (PMB), who structured and place the issue said that Commercial Bank was comfortable with a long term view, at a time when most buyers were looking to invest in short-term paper.

“In a scenario when investors are shy to lock in on the long term, this four-year instrument could be viewed as a welcome change,” PMB said Wednesday.

The issue is structured in a way that, interest rates are fixed for notes with tenures falling within the first two years, while a variable rate (AWPLR plus) was applicable for the balance two years.

These trust certificates are secured by a quality portfolio of leases and the monies raised will be utilided to further augment PLC’s fund base and to pursue its aggressive growth strategy.

Deutsche Bank AG acted as the Trustee to the issue.

PMB earlier raised Rs. 350 mn through two similar securitization issues for PLC.

PLC also has an A (sri) rating from Fitch Ratings Lanka for a billion rupee securitisation programme. Last year the eight year old firm used its rating to raise up to Rs. 500 mn by way of securitised paper.

PLC operates 14 branches and one window office islandwide and around 75 percent of its lease portfolio consists of facilities granted to passenger/commercial vehicles.

-LBO Newsdesk:

The Cabinet on Wednesday evening passed a Cabinet paper to modify a restructuring plan for the loss making CEB, though unions say they knew nothing of it.

“We will be going on strike from this afternoon (Friday) till 8.00 am on Saturday. There is no one working and so there could be the possibility of a blackout. We will meet again on Monday to decide what to do next,” Secretary of the CEB Office Services Union, Amarapala Ranchigoda said.

All of the CEB’s 52 unions were on a ‘work to rule’ campaign this morning, until it was clear what exactly the Cabinet had passed.

“Our work to rule is in protest of what they did. They say they have approved some kind of Cabinet paper but it was not in consultation and we don’t know what they have passed,” Chief of the CEB Engineers Union, Ananda Piyatilake said.

The Engineers Union will meet this evening to decide if they will join the strike and what their next move will be.

Power and Energy Minister Susil Premajayantha said on Wednesday that a controversial cabinet paper to dismantle the CEB into independent units of generation, distribution and transmission was being withdrawn.

In its place, Cabinet approval was being sought for a concept paper to replace that model with Strategic Business Units under a single state owned company, Premajayantha said.

The Janatha Vimukthi Peramuna (JVP) – a coalition partner in the ruling Alliance government have been threatening to pull out of the Alliance if reforms in the CEB and Ceylon Petroleum Corporation go ahead.

Three JVP ministers walked out of the Cabinet meeting on Wednesday, in protest at the Cabinet paper that was taken up, accusing the government of trying to rush it through.

-LBO Newsdesk: