BOC draws big lender appetite; raises $ 200 m syndicate loan with Emirates NBD

Friday, 26 July 2013 00:01 - - {{hitsCtrl.values.hits}}

By Shabiya Ali Ahlam State-owned giant Bank of Ceylon (BOC) has elicited big appetite from international lenders, enabling it to raise $ 200 million at an all inclusive lowest rate of below 3% via a one year syndication loan arranged by Emirates NBD Capital Ltd., Dubai. The initial target had been $ 150 million, but in the book building process, BOC had been able to create a demand of $ 300 million. The bank eventually upsized the issue to $ 200 million and will use the new funds for trade finance and general corporate purposes. The signing of the agreement and the exchange of documents took place at the BOC head office yesterday and was witnessed by

top officials involved in the syndication. Emirates NBD, a leading financial institution with a strong track record in the syndicated loan market, acted as the sole book runner for this transaction. The syndication was joined by 14 other banks across the globe. Lending banks include Axis Bank, Bank of Baroda, Burgan Banks S.A.K., The Commercial Bank of Qatar, Gulf Bank KSC, Indian Overseas Bank, National Bank of Abu Dhabi PJSC and Standard Chartered Bank. Joining in as mandated lead arrangers was Union Bank PJSC and as lead arranger, Doha Bank. Coming in as arrangers were Askari Bank, First Gulf Bank PJSC and Habib Bank, and lead manager for this transaction was Banque De Commerce et de Placements. “The facility was well received in the market since the total book size reached US$ 300 million during syndication. This represents an impressing oversubscription of 100%,” said Emirates NBD Vice President Faisal Noorali Lalani. The BOC Chairman noted that the outstanding success of the syndication once again demonstrated the confidence placed by international investors on the bank. “The signing of this syndicate loan, which has the lowest rate and an underwriting component, shows that foreign banks trust not only BOC but also have confidence in the economy and the country as well,” said the bank’s Acting General Manger/Senior Deputy General Manager International, Treasury and Investment P.A. Lionel. BOC’s national long term rating is AA+ (lka) with a Stable Outlook, which is the highest rating awarded to a local commercial bank by Fitch Ratings Lanka Ltd. He said that having called for quotations, the bank received eight proposals and after evaluation, Emirates NBD was selected to be the book runner. “We went ahead with Emirates NBD as it was the only bank that proposed an underwriting of US$ 100 million,” Lionel explained. To date, BOC has obtained over 10 syndicate loans from both foreign banks established in Sri Lanka and international banks. Over the last two years, the State-run bank obtained syndicate loans from Mashreq Bank from the Middle East and changed its mandate to Emirates NBD this year, added Lionel. In 2012, BOC outstripped the market by recording the highest ever post tax profit of Rs. 19.79 billion and a total asset base of over Rs. 1 trillion.