Debentures worth Rs 13.95 arba yet to enter the market; Find the list with all details
Thu, Jan 9, 2020 3:22 PM on Bonds & Debentures, Exclusive, Stock Market, Latest,
The consideration provided by Nepal Rastra Bank (NRB) while calculating CCD ratio on funds collected via debentures has brought a wave a debenture issuance in the current fiscal year.
Currently Kumari bank' "10.25% KBL Debenture 2076" is open for application. Apart from that 7 other banks and financial institutions are in process of issuing debentures. The 5 five BFIs on the list are commercial banks and 2 are finance companies. The table below lists all the upcoming debentures and their relevant information:
| S.N. | Name of Company | Maturity period | Interest rate | Amount of Issue | No. of Units | Public Issue Units | Private Placement Units | Issue Manager | Status |
|---|---|---|---|---|---|---|---|---|---|
| 1 | Goodwill Finance (GFCL) | 7 years | 12% | 250,000,000 | 250,000 | 100,000 | 150,000 | NIBL Ace Capital | Under preliminary review |
| 2 | Everest Bank (EBL) | 7 years | 10.25% | 1,000,000,000 | 1,000,000 | 400,000 | 600,000 | NIBL Ace Capital | Under preliminary review |
| 3 | Agricultural Development Bank (ADBL) | 7 years | 10.35% | 2,500,000,000 | 2,500,000 | 1,000,000 | 1,500,000 | NIBL Ace Capital | Reviewed and comment sent |
| 4 | Citizens Bank International (CZBIL) | 10 years | 10.25% | 2,500,000,000 | 2,500,000 | 1,000,000 | 1,500,000 | Global IME Capital | Reviewed and comment sent |
| 5 | ICFC Finance Company (ICFC) | 7 years | 12% | 200,000,000 | 200,000 | 80,000 | 120,000 | Global IME Capital | Replied and under review |
| 6 | Nepal SBI Bank (SBI) | 10 years | 10% | 2,500,000,000 | 2,500,000 | 1,000,000 | 1,500,000 | Kumari Capital | Replied and under review |
| 7 | Nabil Bank (NABIL) | 6 years | 10% | 2,000,000,000 | 2,000,000 | 800,000 | 1,200,000 | Laxmi Capital Market | Replied and under review |
| 8 | kumari Bank (KBL) | 10 years | 10.25% | 3,000,000,000 | 3,000,000 | 1,200,000 | 1,800,000 | Nepal SBI Merchant Banking | Issue current open |
| Total | 13,950,000,000 | 13,950,000 | 5,580,000 | 8,370,000 |
ICRA Nepal has assigned the issuer rating of [ICRANP-IR] BB assigned to Goodwill Finance Limited (GFCL). Issuers with this rating are considered to have moderate risk of default regarding timely servicing of financial obligation.
ICRA Nepal has also reaffirmed the rating of [ICRANP] LBB for GFCL’s subordinated debenture programme worth NPR 250 Million. Instruments with this Rating are considered to have moderate risk of default regarding timely servicing of financial obligations.
Similarly, CARE Ratings Nepal has assigned CARE-NP BBB- [Triple B Minus] to the ‘12% ICFC Finance Limited Debentures 2083’. Instruments with this rating are considered to have moderate degree of safety regarding timely servicing of financial obligations in Nepal. Such instruments carry moderate credit risk.
Likewise, ICRA Nepal has assigned [ICRANP] LAA- (pronounced ICRA NP L double A minus) to the proposed subordinated debenture programme of NPR 2,000 million of Nabil Bank Limited. The subordinated debenture rating of AA- is one notch lower than the rating of AA. Instruments with AA- rating are considered to have a high degree of safety regarding the timely servicing of financial obligations. Such instruments carry very low credit risk. Similarly, ICRA Nepal has also reaffirmed the rating of [ICRANP-IR] AA- (pronounced ICRA NP Issuer Rating Double A minus) to Nabil Bank Limited (Nabil). The entities with [ICRANP-IR] AA- rating are considered to have high degree of safety regarding timely servicing of financial obligations. Such issuers carry very low credit risk.
The remaining for issues haven't received ratings yet.
As seen through table, a total of Rs 13.95 arba will be swept from the market by the debetures in near future. The maturity ranges from 6 years to 10 years. Similarly, the finance companies are offering higher interest rates of 12%, while commercial banks' rate is hovering around 10%.
