rnFor the first tranche, the bank will issue debt paper worth Rs. 300 mn, with the option of issuing a further Rs.
300 mn in the event of an oversubscription.
rnThe issue carries an interest rate varying from a 14 percent to a 1.5 percent premium above the twelve-month treasury bill, says Ajantha Madurapperuma, AGM Corporate Finance.
rnInvestors keen on a fixed return can opt for a monthly interest payment option of 14 percent per annum or for an annual payment of 15 percent.
Those keen taking on the floating rate option, would be entitled to a 1.5 percent premium above the one-year treasury bill rate, subject to a cap and floor.
rnThe funds raised through this issue will also help the bank to expand its medium and long term lending portfolio such as leasing and housing construction.
rnMost quoted commercial banks have opted for a credit rating before tapping the market for debt finance. But Seylan has opted to go without a rating. The bank
quote s deposit base is the second highest among quoted private banks.
rnBut Madurapperuma says a credit rating will be obtained once the country quote s economic situation is in a more stable footing. ldblquote A rating gives out information about the bank. But Seylan has been around for a long time and is well known in the rural market, dblquote he said.
rnFor the first quarter of 2002, Seylan posted an after tax profit of Rs. 137 mn, a 282 percent jump over of Rs.
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35.9 mn year on year. Figures for the first six months are out in the next few days and analysts expect profitability numbers to hover around Rs. 600 mn.rn