Business

Commercial leasing completes Rs.325 million secured debenture issue

Director Commercial Leasing Preethi Jayawardena hands over Debenture Agreement to B. H. M. G. Dharmasiri, DGM Corporate Banking, Commercial Bank in the presence of (from extreme left) Malinda Samaratunga, Finance Manager/Treasurer and Dr. Dilanjan Soysa - GM/CEO of Commercial Leasing; Amitha Gooneratne, MD/CEO Commercial Bank and Chaminda Ranatunga, Director/CEO Investec Capital.

Commercial Leasing Co. Ltd (CLC), a leasing company in Sri Lanka, announced the successful private offering of a secured redeemable debenture issue of Rs. 325 million. The debentures are secured by specific finance lease contracts of CLC, and the principal and interest payments are unconditionally and irrevocably guaranteed.

The core objective of this issue was to finance new lease portfolios as part of CLC's growth strategy. CLC firmly believe that this process provides effective medium term funding which in turn allows for very attractive medium term returns to investors.

The transaction consists of senior pass through fixed and floating rate certificates due from August 2005 - February 2009. Various structural features were built into this transaction to protect investors such as diverse accelerated amortisation triggers and overcollaterlisation to provide credit enhancements.

Investec Capital Limited was the Lead Arranger and Commercial Bank of Ceylon Limited acted as Co-Arranger for the transaction.

General Manager/Chief Executive Officer of Commercial Leasing Co. Limited Dr. Dilanjan Soysa said, "We are pleased that, together with Investec Capital and Commercial Bank we are able to access alternative sources of capital market funding.

This issue not only increases the amount of capital available for disbursement, but it is an important indicator of the strength of our assets and the durability of our business model. Our continuing ability to access low cost capital in the public and institutional markets gives us considerable competitive advantage to build shareholder value."

Established in 1988 as a Private Limited Company and converted to a Public Limited Company in 1992, today CLC has emerged as a major player in the leasing industry.

The company provides a wide range of services including Finance Leasing, Operating Leasing, Hire purchase and Debt Factoring.

The company has made a pre-tax profit of Rs. 237 million in year 2004 and was able to post Rs. 80 million pre-tax profit in the first quarter of 2005, an increase of 60% from the previous corresponding quarter.

F J & G De Saram, , acted as the legal advisors for the transaction.