BOC raises Rs. 5 b via BASEL III compliant Additional Tier 1 capital perpetual bonds

Monday, 6 July 2020 01:41 - - {{hitsCtrl.values.hits}}

Bank of Ceylon (BOC), the largest bank and the market leader in the financial services sector in Sri Lanka, has successfully raised Rs. 5 billion via a private placement of Basel III Compliant, Unlisted, Unsecured, Subordinated, Perpetual, Additional Tier I Capital Bond issue with Non-Viability Write Down features.

The private placement opened on 25 June and subsequently closed on 3 July, as it was fully subscribed. The Managers and Registrars for this bond issue is the Investment Banking Division of Bank of Ceylon.

This bond issue was approved by the Securities and Exchange Commission of Sri Lanka and Central Bank of Sri Lanka.

BOC said the issue was a novel debt instrument to the Sri Lankan debt capital market. The bonds are not listed on the Colombo Stock Exchange and confined to qualified investors. The bonds are irredeemable and may be callable by the Bank at its discretion at any time after expiry of 5 years from the date of issue subject to approval of the Central Bank of Sri Lanka.

The bonds carry a floating interest rate of 12 month net Treasury bill rate + 1.5% p.a. with a floor rate of 9.5% p.a.

BOC said the long term funds raised through this bond issue will be utilised for the long term financial needs of the priority sector of the economy while strengthening the Tier I Capital of the Bank. BOC’s customer base ranging from retail customers to large private and public sector enterprises coupled with BOC’s large branch network will provide a solid platform to utilise the funds profitably and efficiently.

BOC is a premier financial institution of the country with an unparalleled track record of eight decades in driving the country’s socio-economic development through partnering the growth of individuals, businesses and the Government by providing access to finance and safeguarding public interest. BOC accounts for 19% and 22% respectively of the banking industry’s assets and deposits and thereby is the largest bank in the country. As a fully state owned, domestic systemically important bank, BOC’s role extends beyond that of mere financial intermediation and its impact on the economic and social fabric of Sri Lanka is unmatched. BOC is rated AA+ (lka) by Fitch Ratings Lanka Ltd. and (SL) AAA by ICRA Lanka Ltd.

BOC has many landmark achievements in the fund raising arena, public and private and in domestic and foreign markets. As of date BOC has raised Rs. 84.21 billion locally by issuing listed and unlisted debentures and $ 1 billion through issue of international bonds in 2012/13 in overseas markets.