BOC to raise Rs. 15 b via BASEL III compliant debenture issue

The Bank of Ceylon is to raise Rs. 15 billion via the issuance of BASEL III compliant debenture issue with non-viability write down features.

The Colombo Stock Exchange (CSE) has approved in principle its application for the listing of the debentures. The issue is up for subscription whilst its official opening is on 12 September.

BOC will issue 50 million BASEL III compliant Tier 2 Listed Rated Unsecured Subordinated Redeemable five year debentures with non-viability write down features at an issue price of Rs. 100 each to raise Rs. 5 billion with an option to issue up to a further 50 million of the said debentures worth Rs. 5 billion at the discretion of the bank in the event of an oversubscription of the initial issue and with a further option to issue up to a further 50 million debentures worth Rs. 5 billion at the discretion of the bank in the event of an oversubscription of the initial issue and the second tranche.



The issue comprises two types of debentures. Type A offers fixed coupon rate of 13.50% per annum with an AER of 13.50% payable annually, and Type B offering a floating coupon rate of 12-month T.bill rate + 1% payable annually.

Via the latest issuance BOC intends to utilise the proceeds of this issue to strengthen the Tier II capital and to expand the business growth.

With over 85 years of trust, stability and leadership in the Sri Lankan banking industry, the bank has raised over Rs. 100 billion by issuing debentures successfully in the market. Being the largest commercial bank in the country, BOC is one of the major contributors to the country’s economic development. 

This is a BASEL III compliant, rated, unsecured, subordinated, redeemable debenture that will be listed on the CSE. The debenture is rated AA- by Lanka Ratings Agency Ltd. and the BOC’s National Long-Term Rating is ‘A(lka)’/ Stable by Fitch Ratings Lanka Ltd.

The issue is confined to qualified investors as stated in the prospectus and the minimum subscription requirement for Qualified Investors will be Rs. 10,000. However, the minimum subscription requirement for an individual Qualified investor will be Rs. 5 million. Any application in excess of the minimum subscription requirement should be in multiples of Rs. 10,000.

BOC said similar to its previous issues this debenture issue is also structured and managed by the Investment Banking Division of the bank. The Legal Department acts as lawyers to the issue while the Corporate Branch acts as bankers to the issue. Investment Banking Division continues to be the registrars for the proposed issue, while Hatton National Bank will be the trustee to the issue. 

Applications and prospectus containing details of the debenture issue can be downloaded from the web sites of the CSE; www.cse.lk and BOC; www.boc.lk and will be available at all trading participants and the custodian banks of the CSE.

Duly completed application forms should be enclosed in an envelope marked “BOC Debenture Issue” together with the remittance for the full amount payable on application and delivered to the Investment Banking Division at 7th Floor of BOC Head Office or collection points mentioned in the prospectus.

Leading in every frontier of banking in the country, BOC owns the largest balance sheet in the industry that comprises of over Rs. 4 trillion asset base, and a network that is over 2000 customer touch points. With over 85 years’ of experience, Bank of Ceylon has become the most stable and the trusted bank in the country that serves Sri Lankans from all walks of life helping them to build their lives and make themselves financially stable whilst uplifting the country’s economy.

Bank of Ceylon said it invites local and foreign qualified investors to join hands with us by investing in this debenture issue and contributing to the economic and social development of the country.