Opportunity to buy debentures from Asia Asset Finance

 

Asia Asset Finance PLC aims to raise Rs. 1 billion through the issuance of a listed debenture. 7.5 million covered, recorded, redeemable; hence these debentures will issue at Rs. 100. In the case of an over-subscription of the initial amount, the shareholders will give a further 2.5 million debentures. The issue opens on 29 September, but it is possible to subscribe from now on.

ICRA Lanka Limited's Issuer Rating is [SL]BBB+ with a negative outlook, and ICRA Lanka Limited's Issuer Rating is [SL]A-(SO) with an opposing view. Interest rates for the three-year debenture offered are: Form A: 10.28% Fixed Coupon Rate p.a. Annually payable (AER: 10.28 per cent)—form B: +3.75 per cent p.a. floating rate equal to the one-year Treasury bill rate Annually payable.

The funds raised through the Debenture Issue would finance expansion by growing the gold loan portfolio all within the first six months from the date of allocation. The Company entered into a mortgage bond dated 23 September, establishing a primary mortgage for the trustee over the future gold loans generated in the centres described.

The primary mortgage will form the entire future gold loan portfolio generated from 1 September onwards in the pre-specified branches of the Company. The managers for the problem are Capital Alliance Partners, and the registrars for the issue are PW Corporate Secretarial.

OSL Take: The increase in opportunity for debentures is indicative of the level of confidence in Sri Lanka's economy and investment interest. The economic policies of the country that have resulted in the overall growth of Sri Lanka's banking sector would undoubtedly serve the requirements of the foreign businesses/investors exploring opportunities on the island.

Furthermore, following the incentives provided by the Government of Sri Lanka, the rise in economic activity in Sri Lanka will drive economic growth to higher levels next year. The government of Sri Lanka is committed to introducing several policies aimed at strengthening and consolidating the country's economy while attracting foreign investment by continuously improving the business environment of the island nation. It is evident from the comments made by the Sri Lankan Minister of Finance and the Senior Advisor to the Ministry of Finance that Sri Lanka is moving towards achieving overall economic growth.

The country's favourable business climate would draw foreign companies/investors to pursue opportunities in Sri Lanka. Given Sri Lanka's geographical location in the Indian Ocean, it has been made an attractive business destination in the South Asian region by the ease of doing business in the country and the many trade agreements and trade concessions enjoyed by the state.  

 VBS/AT/19102020/Z_TB6