The instrument that has been rated AAA by Ram Ratings (Lanka) Ltd, offered 14,000,000- redeemable, guaranteed debentures to the public at a face value of Rs 100- each and had received approval from the Colombo Stock Exchange. The issue opened for subscription on 21st of August 2014, and saw substantial interest from an entire spectrum of Investors that included Banks, Insurance Companies, Institutional Investors and Retail Investors.
The Debenture issue of Softlogic Finance was made in collaboration with GuarantCo who have guaranteed the instrument that also carries a Barclays Bank guarantee as part of GuarantCo’s structure. The Five Year Issue (2014/2019) offered attractive fixed and floating interest rates payable quarterly. The two options included; Option A –a fixed interest rate of 10% payable quarterly with an AER of 10.38% or Option B – based on a floating interest rate of three months net Treasury Bill + 1.50%, paid quarterly. The issue was managed by First Capital and legal counsel was provided by Nithya Partners. Trustees to the issue are Deutsche Bank AG and PW Corporate Secretarial are acting as registrars to the transaction.
The transaction is viewed by many as a groundbreaking event, not only as a result of the AAA rating given to the issue, but also due to it paving the way towards more foreign participation in providing alternative solutions to developing the debt capital market in the country. Commenting on the successful culmination of the transaction Mr Ashok Pathirage, Chairman, Softlogic Finance PLC said “We are very happy to have structured this landmark transaction that has received tremendous investor interest. We will continue to explore alternative means of funding that will be utilized to develop the very important SME sector of the country.”
GuarantCo is owned by the PIDG members through the PIDG Trust and, in the case of DGIS, through FMO. The GuarantCo concept came from the Private Infrastructure Development Group (“PIDG”) which is a multi-donor, member-managed organisation. Current PIDG members include: the UK Department for International Development (“DFID”), the Swiss State Secretariat for Economic Affairs (“SECO”), the Netherlands Ministry of Foreign Affairs (“DGIS”), the Swedish International Development Cooperation Agency (“Sida”), the World Bank, the Austrian Development Agency (“ADA”), Irish Aid, Kreditanstalt für Wiederaufbau ("KfW"), and the Australian Agency for International Development (AusAid).
Softlogic Finance PLC – is a part of the Softlogic Group that has interests in Healthcare, Retail, Financial Services, ICT, Leisure, Automobiles and Restaurants. The Company is a Registered Finance Company under Finance Business Act No 42 of 2011, as well as being a Specialized Leasing Company, licensed by the Central Bank of Sri Lanka under the Finance Leasing Act No. 56 of 2000. The principle lines of businesses include Leasing and Hire Purchase, Fixed Deposits and Savings, Personal Loans, Business Loans, Gold Loans and SME Loans.
