Bank of Ceylon raises Rs. 5 b via latest debenture issue

Wednesday, 24 November 2021 00:21 -     - {{hitsCtrl.values.hits}}

Bank of Ceylon (BOC) has raised Rs. 5 billion via a private placement of Basel III Compliant, Rated, Unlisted, Unsecured, Subordinated, Redeemable Debenture issue with Non-Viability Write Down features. 

The amount to be raised was Rs. 5 billion with an option to issue up to a further Rs. 3 billion at the discretion of the bank. This issue was approved by the Securities and Exchange Commission of Sri Lanka and Central Bank of Sri Lanka.

Bank General Manager K.E.D. Sumanasiri said despite the high volatility in the bond interest rates, the bank received a very positive response for the unlisted debentures, predominantly for the five-year category which carried an attractive interest rate of six months gross Treasury Bill rate plus 2.5% per annum with a floor rate of 9.00% per annum. 

The debenture issue was opened on 16 November and restricted only to qualified investors. With the third quarter profits of Rs. 35.6 billion, the bank decided to close the subscription list on 19 November after oversubscription of the initial issue of Rs. 5 billion. 

Sumanasiri thanked all the investors who placed their confidence with BOC and supported to make the issue a success.  

The debentures were issued with the main objective of strengthening the Tier II Capital of the bank. The long-term funds raised by this debenture issue will be utilized for financing the priority sector of the economy that is affected by the pandemic. The debentures were rated at AA+ by ICRA Lanka Ltd. and not listed in the CSE. 

In July, Bank of Ceylon issued Basel III Compliant, Unlisted, Rated, Unsecured, Subordinated, Additional Tier I Capital Perpetual Bonds with Non-Viability Write Down features and was successful in raising Rs. 3.35 billion. 

Among numerous landmark achievements in fund raising, BOC has previously raised Rs. 102.56 billion locally by issuing listed and unlisted debentures and perpetual bonds.

Investment Banking Division of Bank of Ceylon is the Managers and Registrar to this debenture issue.