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Sampath Bank said in a stock exchange filing that it will issue a 5 year debenture with an option for conversion to ordinary voting shares if instructed by the Central Bank.
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The bank earlier said it is expected to raise 6 billion rupees by the issue of 60 million debentures with a par value of 100 rupees each subjected to necessary approvals.
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Sampath Bank said they identified the need to strengthen the Tier II capital base as per BASEL III requirements which will facilitate the company’s forecasted asset growth.
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“The Company intends to utilize the entire proceeds to expand the loan book via diverse lending products in the ordinary course of business over a period of three to six months,” the bank said in a stock exchange filing.
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“In the interim, such funds would be invested in short term government securities, which based on the current rates would generate a return of 9.8% — 10.0% p.a respectively.” The bank further said it complied with the Basel II and III regulatory requirements for capital adequacy as at 1st July 2017. The final rating for the proposed debt issue will be issued by Fitch Ratings and will be incorporated in the prospectus.
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