HDFC Bank embarks on first debenture issue
Housing Development Finance Corporation Bank (HDFC Bank) has notches yet another historic milestone in its 30-year history, debuting an Rs. 1 billion debenture issue, with expectations of increasing it by a second Rs. 1 billion in the event of full subscription.
The state-owned bank listed on the Colombo Stock Exchange, adds crucial impetus to the bank's ethos of being 'The Housing Bank', which serves a market segment to who the primary need of shelter has remained elusive due to economic and social diktats, a statement of the bank said. With the issue date set on 21st October, the secured, senior, rated and listed debentures will have a maximum tenor of five years, affirming a fixed rate quarterly interest of 14.5% for three years, 15% also quarterly for four years and 15.5% annually for a five years.
Bank
Chairperson
Siromi Wickramasinghe is adamant that HDFC's entire business model and philosophy is one of social responsibility. "Housing finance options is our business but these are options that reach out to the masses, the lower and middle income groups which encompass about 75% of this country's population. We strongly believe that these income groups infuse considerable impe- tus into the country's economic development but are most often, unable to gain funding access to own a home."
Ms. Wickramasinghe said the trend has been to borrow at normal rates in the short term, but given the characteristics of the bank "we lend long term, which doesn't augur well for maintaining prudence."
She added: "This means that it's challenging to meet the entire purpose of our founding tenets, while maintaining a sustainable business operation. We've always been a bank that has presented a corporate presence that goes beyond compliance, whether in governance, transparency, risk management, ethics or accountability and similarly, we are answerable not only to our shareholders, but also to the Securities & Exchange Commission, Central Bank of Sri Lanka and the Parliament of Sri Lanka."