BoC’s landmark Rs. 10 b debenture issue oversubscribed

Bank of Ceylon’s (BoC) Basel III Compliant Tier 2 listed debenture issue worth Rs. 10 billion has been oversubscribed.

When the issue closed on 22 December, there had been 49 applications requesting for debentures worth Rs. 10.011 billion.

The Bank issued 50 million Basel III Compliant, Tier 2 Listed, Rated, Unsecured, Subordinated Redeemable Debentures with a Non-viability Conversion feature at Rs. 100 each. The debentures are rated BBB+ (lka) by Fitch Ratings.

The debenture issue was for a period of five years and came in two types. Type A carries a fixed interest rate of 15% payable annually and Type B carries a floating interest rate of 12 months T-Bill Rate + 1.00%.

Applications were only for Type A debentures (15% per annum fixed rate) from resident qualified investors. BOC said investors who applied up to an inclusive value of 20 million Type A debentures will be allotted 100% of debentures applied. Those who applied over and above 20 million Type A debentures will be allotted 20 million debentures plus 99.71% of any balance undistributed application amount rounded to the nearest 100 debentures. Any differences arising will be adjusted from the largest debenture holder.

BOC said the success epitomises the trust placed in the Bank during challenging times. The Basel III Compliant, Listed Issue was a first of its kind for a State Bank.