Debenture issues

[First Guy]

There were a spree of debt issues with Commercial Bank and HNB issues completed and NTB completed today

Currently available ones are (on 1st Nov 2016)

DFCC - up to 7 years at 12.75% pa opening on 2nd Nov

SFCL - up to 4 years at 13.75% pa opening on 4th Nov


PLC issue is coming up

[catseye]

Hi FG,
Any specific reason to have so many debenture issues with in a short period time ? Is it due to uptrend of interest rates ?

[First Guy]

That can be a good reason but some time back they issued at higher rates too when the rates were at peak. So if these are to roll over, then their interest cost on issued debt is going to reduce a little.

I am not an expert on these

[yaka]

there is an issue with new 'debenture issues'


what I mean is earlier they use to update these in to the CSE web site at least 02 weeks prior to the issue open date giving ample of time ahead.
but now they uodate this to the CSE only 03-04 days before where persons out of the country can't apply because they only accept original document with signature on it. I'm very sad missing all these last debentures specially SFCL with 14% rate.

[RanaTop contributor]

why they don't allow to subscribe debentures via CDS account . that mean via broker's online trading software

[yaka]

you may be able to catch some if anyone willing to sell on the board which is rare. also on higher price.

but still SL strongly hang to the paper docs, and noway to do it from away the country

[Antonym]

there is an issue with new 'debenture issues'


what I mean is earlier they use to update these in to the CSE web site at least 02 weeks prior to the issue open date giving ample of time ahead.
but now they uodate this to the CSE only 03-04 days before where persons out of the country can't apply because they only accept original document with signature on it. I'm very sad missing all these last debentures specially SFCL with 14% rate.

If you are not a resident, the issuer company can accept scan copy of debenture application by mail - if you apply for significant quantity through your SIA Account. Besides, it helps to establish contact with a person who can assist, inside the company.

[yaka]

thanks Antony didn't see you around for long...

thanks for the information I'll call SFCL if so as all others closed. I tried with two different brokers both said same thing. one company is even managers to the issue. seems you are knowledgable than them

[Antonym]

thanks Antony didn't see you around for long...

thanks for the information I'll call SFCL if so as all others closed. I tried with two different brokers both said same thing. one company is even managers to the issue. seems you are knowledgable than them

The spree of Debenture Issues appears to have been timed to conclude before the budget. The issuers seem to have known that Ravi was going to remove the tax exemption on corporate debt!

http://www.economynext.com/Sri_Lanka_to_tax_listed_debt,_unit_trusts_income;_bond_interest,_EPF_taxed_at_14_pct-3-6595.html

[First Guy]

Yes timing was strange now explained.

[BackstageTop contributor]

A fund manager told me about this in August.

[catseye]

Hi All,
I got two things to clarify, not found much info from any other sources.
Is this effective from 1st April 2017 or from 1st of January?

This 14% tax on interest  applicable for the new issues after that date or existing ones?

If you have any info, please share.

[BackstageTop contributor]

April was mentioned for CGT so I expect all else from Jan. Not sure though.

[catseye]

Got a update

http://economynext.com/Sri_Lanka_may_charge_taxes_on_listed_bonds_issued_from_this_month-3-6630-1.html

[BackstageTop contributor]

Thanks Cat.

[BackstageTop contributor]

This is really good news for equity.

[First Guy]

This is really good news for equity.

Not much. The tax exemptions were given in the hope of increasing trading activity in the secondary debt market. That never happened. Most retail investors who bought hold them till maturity and bought instead of FDs (good decision). Not really as a substitute for stocks.

What is happening in the US is now affecting us and other emerging markets. This is the main threat.

[Yin-Yang]

This is really good news for equity.

Not much. The tax exemptions were given in the hope of increasing trading activity in the secondary debt market. That never happened.
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Fools!

How could tax exception increase activity, in this part of the world?
It should have been the other way around.

Or else, they should have put a nice story of a group of nuts earning billions by trading bonds in CSE with a nice pic of bikini clad lasses surrounding them in the paper.

Or else, should have asked some perera or rishan or someone to buy few bonds here and there.

[Danidu]

Commercial Bank Debenture Issue - July 2018

https://drive.google.com/open?id=1afsDkZDxTnWwJkFLNBrpvpd-YaTGHvRn