MBSL Debenture Issue 2013

Dishan · 1 MBSL Debenture Issue 2013 Tue Mar 12, 2013 1:56 pm

Dishan

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Dear All,

MBSL Debenture Issue Prospectus can download on the following link.

http://www.mbslbank.com/downloads

Zero1 · 2 Re: MBSL Debenture Issue 2013 Tue Mar 12, 2013 2:16 pm

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What is the interest rate bro?

salt · 3 Re: MBSL Debenture Issue 2013 Tue Mar 12, 2013 2:27 pm

salt

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for lazy people
Type A- 5 Year Debentures carrying Interest @17.50% p.a payable Annually
Type B- 4 Year Debentures carrying Interest @17.25% p.a payable Annually
Type C- 5 Year Debentures carrying Interest @16.70% p.a payable Quarterly
Type D- 5 Year Debentures carrying Interest @16.50% p.a payable Monthly

I think this will impact negatively in PLC as this is more retailer friendly in allocation

Last edited by salt on Tue Mar 12, 2013 3:24 pm; edited 19 times in total

Dishan · 4 Re: MBSL Debenture Issue 2013 Tue Mar 12, 2013 2:32 pm

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Type A- 5 Year Debentures carrying Interest @ 17.50% p.a payable Annually

Type B- 4 Year Debentures carrying Interest @ 17.25% p.a payable Annually

Type C- 5 Year Debentures carrying Interest @ 16.70% p.a payable Quarterly

Type D- 5 Year Debentures carrying Interest @ 16.50% p.a payable Monthly

WildBear · 5 Re: MBSL Debenture Issue 2013 Tue Mar 12, 2013 3:09 pm

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Those who cant apply for PLC denentures , have the opportunity to apppy to this. Minimum subscription is 100 debentures.

sampathpf · 6 Re: MBSL Debenture Issue 2013 Tue Mar 12, 2013 3:13 pm

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How about Ratings?

salt · 7 Re: MBSL Debenture Issue 2013 Tue Mar 12, 2013 3:36 pm

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http://www.ram.com.lk/reports/1341552806.pdf

Merchant Bank of Sri Lanka PLC - Rating Review 2012: AA-/P1 (Stable Outlook)
RAM Ratings Lanka

no ratings from Fitch Lanka or ICRA Lanka

yaka · 8 Re: MBSL Debenture Issue 2013 Tue Mar 12, 2013 4:01 pm

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can some 1 explain me what is "unsecured" mean since i'm new.and plz any advise is it safe and profitable to invest on this?

sampathpf · 9 Re: MBSL Debenture Issue 2013 Tue Mar 12, 2013 4:20 pm

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Thanks "Salt"
I think MBSL - Debentures more targeting on Retailers compare to PLC Debentures

Chinwi · 10 Re: MBSL Debenture Issue 2013 Tue Mar 12, 2013 5:22 pm

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@yaka,
unsecued means in a failure of the company your investment is lost. For Secured debentures undrwriting agency pays you if the company failed.
eg. Vanik failed to pay back matured debentures and people lost millions. They also issued secured debentures and underwriters HSBC? paid the debenture holders.
Usually unsecured come with high interest and secured with lower int .

sampathpf · 11 Re: MBSL Debenture Issue 2013 Tue Mar 12, 2013 6:00 pm

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I think I Unsecured mean "not be secured by an any specific assets of the Company"

yaka · 12 Re: MBSL Debenture Issue 2013 Tue Mar 12, 2013 6:13 pm

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thnx a lot chinwi. and if so is it safe to invest money on this particular debenture ?

WildBear · 13 Re: MBSL Debenture Issue 2013 Tue Mar 12, 2013 10:21 pm

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yaka wrote:thnx a lot chinwi. and if so is it safe to invest money on this particular debenture ?

This company is backed by state banking giant BOC, In CSE, not many debentures got defaulted, Vanik is the only rotten debenture I saw, does Chinwi know any other ?
However debentures arw generally much more safer than stocks.

Liber Abaci · 14 Re: MBSL Debenture Issue 2013 Tue Mar 12, 2013 11:49 pm

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yaka wrote:can some 1 explain me what is "unsecured" mean since i'm new.and plz any advise is it safe and profitable to invest on this?

"unsecured " - I also tend to agree with sampath pf .......unsecured means not secured by any specific asset of the company. Normally secure debentures are issued to a Bank, or to a single Institution backed by a mortgage of an asset. When debentures are issued to general public , normally it is unsecured, and the interest rate indicate the level of risk.

PROFITABILITY - now in this case interest rate is fixed for next 4-5 years. So, you can compare it with other type of investments. As at now, since one year Bank FD rates are around 13%-15% this is profitable for the current year. If bank rates move above 17 % ( which has happened in the past ! ) in next 4-5 years you will loose. So you should have an opinion about interest movement during next 4-5 years.
Also, if you are confident that you can achieve more than , say 20% p.a through investment in stocks , this investment is not profitable enough.

SAFETY - If the company is unable to repay or goes bankrupt within the period, you won't get interest or capital. Look at their history, past performance, major shareholders and think about that possibility ,(there are opinions in this thread also). Generally MBSL debenture can be considered as secure.
On the other hand if your investment is in stocks , and if prices go down, you may not be able to recover the capital even.
So this is a trade-off between risk and return.

WildBear · 15 Re: MBSL Debenture Issue 2013 Wed Mar 13, 2013 2:55 pm

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The biggest problem in corporate debt instruments is lack of licquidity in secondary market.We have to hold till maturity. I think trading platform is on progress. Hope debt trading become popular among Sri Lankan investors.