New wave of debenture issues to hit the market.

Quibit

Quibit

Senior Vice President - Equity Analytics

Posts : 2674
Equity Stars : 11473
Reputation : 380
Join date : 2010-05-08

Considering the inability of some of the corporates to raise money via rights issues (due to fears of loosing control or inability of the majority shareholders to infuse new capital) it is likely that there will be a new wave of listed debenture issues that will hit the Colombo Stock Market. These debenture issue are likely to carry interest rates ranging from 10% to as high as 18% p.a depending on the ratings each of the debentures would receive from the rating agencies prior to these issues.

This is further likely to take away funds from the currently depressed Colombo stock market which has already been affected by a significant number of IPO's and rights issues during this year.

http://forum.srilankaequity.com/t6273-lolc-to-issue-listed-and-unlisted-debentures-worth-rs-15-b#41975

http://forum.srilankaequity.com/t6272-abans-financial-to-raise-rs-1-b-via-listed-debenture#41974

Wed Jul 06, 2011 5:45 pm by DK · Wed Jul 06, 2011 5:45 pm by DK

Well I did a small calculation based on a likely premium I would pay and the return for Bartleet Finance Debentures. Although the rate is 13%, when WHT is deducted and premium is sorted out, I can get something around 10.89% if I hold it out for the whole 5 years.

Thu Jul 07, 2011 6:13 am by thilankad · Thu Jul 07, 2011 6:13 am by thilankad

While several licensed commercial banks are vying to raise money through right issues,

a new wave of corporate finance options have started to hit the Colombo Stock market from last week.

Several analysts and regulators are of the view that Sri Lanka’s corporate debt market needs more development. Several medium to long-term debt instruments which are listed debentures, will come to hands of Lankan investors during the next couple of weeks, market analysts outline.

Earlier this month, Bartleet Finance Limited (BFN) 2.04 million 13% Fixed Rate Debentures (payable monthly) were listed on the Colombo Stock Exchange’s Debt Securities Main Board.

http://print.dailymirror.lk/business/127-local/49267.html

Fri Jul 08, 2011 8:50 am by skywalker · Fri Jul 08, 2011 8:50 am by skywalker

is the market is in danger of right issues/ debentures which lead to decline in share prices.
all the company's are very interested in rights and debentures which like interest free or less interest loans .