Sampath Bank plans to raise Rs. 1.5 billion by issuing debentures to strengthen its capital base and make long-term money available for lending.
The issue which will open later this month will initially target to raise Rs. 1billion with an option to raise a further half a billion in case of an over subscription.rn
rnThe five-year debenture will take the banks tier two capital close to 13 percent if it is fully taken up by the public.rn
rnAt present the banks tier two capital stands at around 11. 5 percent while the Central Bank requirement for minimum capital is 10 percent.rn
rnSubscribers to the issue can pick between two fixed and one floating rate option to receive interest.rn
rnThe bank says its ldblquote A (sri) dblquote rated debenture by Fitch Ratings Lanka will offer a 10 percent fixed annual return. rn
rnSubscribers can also pick between a bi-annual fixed payment of 9.75 percent or a floating rate of three-month Treasury Bill yield + 2 percent, which will be paid quarterly.rn
rnSampath Bank has already got approval to list the debentures at the Colombo Stock Exchange.rn
rnldblquote Another goal we are trying to achieve is to develop a secondary market in Sri Lanka for listed debt instruments, dblquote said Anil Amarasuriya, MD, Sampath Bank.rn
rnThe bank expects to expand its leasing portfolio and lend for long-term projects with the money raised. rn
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-LBR Newsdesk: LBOEmail@vanguardlanka.comrn