First Capital Treasuries PLC, the Primary Dealer arm and a subsidiary of First Capital Holdings PLC, has announced its intention to issue Listed, Rated, Subordinated, Unsecured, Redeemable Debentures amounting to Rs. 3 billion, with a maturity period of five years.
The primary purpose of the proposed Debenture Issue is to optimize capital through the enhancement of Tier II capital, thereby supporting the Company’s strategic objective of improving its Return on Equity.
In line with the Central Bank of Sri Lanka’s Direction No. 02 of 2015 on the Risk Weighted Capital Adequacy Ratio (RWCAR) – amendment dated 28 October 2015, Primary Dealers are required to maintain a minimum RWCAR of 10% at all times. First Capital Treasuries PLC has obtained approval from the Central Bank of Sri Lanka for the Debenture Issue and for the inclusion of the same in the computation of its RWCAR, effective from the date of allotment of the Debentures.
As of 31st December 2024, the Company’s Capital Adequacy Ratio stood at 17.95%, well above the regulatory minimum. With the completion of the proposed Rs. 3 billion listed debenture issue, this ratio is expected to rise to 24.80%, further strengthening the Company’s capital position.
The full proceeds of Rs. 3 billion are intended to be deployed towards the expansion of the Company’s Government Securities portfolio, based on prevailing market conditions and the interest rate outlook at the time the funds are received.
The Debenture Issue is set to open on the 21st of April and will offer three investment options. Type A will carry a fixed interest rate of 12.00% per annum, payable annually (AER 12.00%). Type B will offer a fixed rate of 11.66% per annum, payable semi-annually (AER 12.00%). Type C will feature a floating interest rate based on the 364-Day Treasury Bill rate plus 2.25% per annum, payable and repriced annually.
First Capital Treasuries PLC stands out as the only non-bank primary dealer to hold an A+ rating from Lanka Rating Agency Limited.
This issuance marks a significant step in First Capital Treasuries PLC’s ongoing efforts to maintain a robust capital base and reaffirm its position as a leading participant in Sri Lanka’s government securities market.
