Massive Rs. 20 b demand for BOC’s Rs. 8 b debenture
Wednesday, 23 October 2013 00:00
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The Bank of Ceylon’s debenture issue 2013 which opened for subscription on 21 October 2013 attracted unprecedented interest among investors, with total bid value surpassing Rs. 20 billion on the opening day itself, forcing the bank to close the issue same day.
The initial offer was for Rs. 4 billion with room to upsize to Rs. 8 billion in the event of over-subscription. However, total value of bids received were more than 250% of Rs. 8 billion as predicted by the senior management of the bank.
The majority of the applications received were for five-year and 10-year fixed
rate categories.
Retail investors have shown interest in the five-year fixed category while insurance companies and pension funds were prominent among the investors who showed interest in long-term (10-year) with bids totalling Rs. 11.6 billion, which is more than 50% of the total value of the applications received.
This trend augurs well for the future capital market development in the country in which BOC expects to play a key role.
The bank will utilise part of the funds raised to retire maturing debentures and the rest will be made available for long-term infrastructure project financing.
“This huge appetite for Bank of Ceylon debt shown by the investors once again highlighted the faith and confidence placed by them in the bank,” said Senior Deputy General Manager (International Treasury & Investments).
