Friday Aug 21, 2026
Friday Aug 21, 2026
Thursday, 20 August 2026 00:25 - - {{hitsCtrl.values.hits}}
Bank of Ceylon (BOC) is to raise up to Rs. 10 billion through a Basel III-compliant Additional Tier 1 (AT1) Bond issue, as the State-owned lender seeks to strengthen its capital adequacy, liquidity position, and asset base.
The bank’s Board of Directors has approved an initial issue of up to 50 million unsecured, subordinated, and perpetual AT1 Bonds to raise Rs. 5 billion, with an option to issue a further 50 million Bonds at the bank’s discretion in the event of oversubscription.
The Bonds, priced at Rs. 100 each, will be unlisted and will not be listed on the Colombo Stock Exchange (CSE) or any other exchange. The issue has been rated ‘AA-‘ (Stable) by Lanka Rating Agency Ltd.
The floating-rate Bonds will carry an annual interest rate equivalent to the 12-month net Treasury Bill rate plus 2% per annum, with interest payable annually.
The issue opens today (20) and is scheduled to close on 31 December 2026 or earlier if the maximum 100 million Bonds are fully subscribed.
If the initial 50 million Bonds are fully subscribed and BOC decides to exercise the option to issue a further 50 million, the subscription list will close at 4:30 p.m. on the market day on which the additional tranche is fully subscribed. The AT1 Bonds may also be issued in one or more tranches.
BOC said one objective of the issue was to increase its Tier 1 capital and strengthen its Capital Adequacy Ratio (CAR). The bank reported a total CAR of 17.22% as at 30 June 2026, against the 15% minimum required under Central Bank of Sri Lanka (CBSL) regulations.
According to the bank, the CAR is expected to rise to 17.45% following a Rs. 5 billion AT1 Bond issue and to 17.69% if the full Rs. 10 billion is raised.
The proceeds are also intended to minimise and manage gap exposure in the bank’s asset and liability portfolios, strengthen liquidity, and increase the asset base.
The Bonds are perpetual and therefore have no fixed maturity. However, BOC may exercise a call option at its discretion after five years from the date of issue, subject to CBSL approval and other regulatory conditions.
The issue is restricted to qualified investors. The minimum subscription is Rs. 1 million for a qualified investor, while an individual qualified investor is required to subscribe at least Rs. 50 million. Subsequent applications above the minimum must be in multiples of Rs. 1 million.
Eligible investors include licensed commercial and specialised banks, development and specialised savings banks, housing banks, co-operative banks and unions, registered finance and finance leasing companies, insurers, licensed securities dealers or brokers, regulated pension and pooled funds, companies with net assets of at least Rs. 500 million, and individuals investing at least Rs. 50 million.
The issue does not have a trustee. BOC said Bond certificates would be issued to investors under the common seal of the bank with the signatures of a Director and the General Manager/CEO.
The bank has obtained approval from the Securities and Exchange Commission of Sri Lanka for the proposed AT1 Bond issue.
