Sri Lanka's UDA Debentures Draws Over Rs 5bn

14th September 2010, www.dailynews.lk, By Harshini Perera

The Urban Development Authority’s (UDA) debenture issue which opened yesterday will be listed in the main board of the Colombo Stock Exchange (CSE). This will be done soon after the debenture issue closure is announced.

This will be a self-financing debenture issue which will be utiised to construct a low-income housing scheme for shanty dwellers in the Colombo metropolitan city limit.

Under this revolving housing project 65,000 units will be constructed and it will enable the Government to use 800 acres of valuable land for commercial purposes in the Colombo metropolitan area. These lands have unauthorized constructions.

There has been over Rs five billion commitment from individuals and institutions so far for the debenture. Bank of Ceylon as the managing body of the debenture needs to distribute it among every party representing society, Bank of Ceylon Investment Deputy General Manager, P.A. Lionel told Daily News Business.

The listing at the CSE will enable investors to liquidise their debenture before five years. It will also improve capital market transactions. “We will not be targeting investors from Colombo but from areas outside Colombo. We have issued applications to the prospectus and once we receive them back, we will allocate debenture shares.

“We have received the CSE approval and the day debenture closes it will be opened for stock market transactions,” Lionel said.

The debenture issue has already received a good response from the public and private sector investors and expects to exceed the limit of Rs five billion, Urban Development Authority Deputy Director General Wasantha Geeganage told Daily News Business.

The debenture is expected to oversubscribe and will increase to Rs ten billion if it is oversubscribed within 14 days. The issue was opened yesterday for Rs five billion and if it reaches the expected Rs 10 billion limit, it will be closed before 14 days.

Depending on the high interest rates it offers and the Government security, Colombo Stock Exchange can expect a high demand for UDA debenture which will be listed in a few days.

There will be many institutional investors involved in the investments, Asia Securities, CEO, Dihan Dedigama told Daily News Business.