Seylan Bank shelves Rs.10bn debt issue

• Says current market conditions prompt the decision 

Seylan Bank last Friday told the market that it decided to postpone a debenture issue to raise up to Rs.10 billion announced in the latter part of July this year due to current volatile market conditions. 

The bank said it obtained shareholder approval for the proposed debenture issue in November and submitted an application to the Colombo Stock Exchange (CSE) seeking approval for the debenture listing.

“At the director board meeting held on November 26, 2020, the board taking into consideration the prevailing market conditions decided to postpone the debenture issue to the first half of 2021,” a filing by the bank said.

“The board decided to review market conditions during the first quarter in 2021 and consider the timing of proceeding with the issue subject to receiving approval of the case on the listing of the debentures,” it added.

On July, 30 Seylan Bank announced the issuance of senior unsecured listed rated redeemable debentures and BASEL III compliant Tier 11, listed, rated, unsecured, subordinated rated debentures with a non-viability conversion (to be issued as subordinated debt of the Bank in accordance with Basel III). 

The bank proposed to issue 50 million debentures of Rs.100 each with an option to issue further 30 million debentures in the event of an oversubscription of the original amount, and a further 20 million debentures upon subscription of the second tranche.