Over Rs. 10 b demand for BOC’s Rs. 8 b debenture

Sri Lanka’s leading bank, the Bank of Ceylon’s Rs. 8 billion debenture issue was snapped up on its official opening day with high demand.

The bank issued 50 million rated, unsecured, subordinated, redeemable debentures at an issue price of Rs. 100 each with an option to issue up to a further 30 million debentures in the event of an oversubscription of the initial issue. The debentures rated AA (lka) by Fitch Ratings Lanka Ltd. are to be listed on the Colombo Stock Exchange.

“The debenture issue was successfully oversubscribed and closed on the opening day itself. There was a significant corporate and retail participation for this debenture and total applications received exceeded Rs. 10.2 billion,” the bank said.

With this issue, the total listed debentures issued by the BOC to the market increases to Rs. 52 billion, while BOC maintains its position as the largest issuer of debentures in the Sri Lankan debt market.

The debentures have five year and eight year maturities with fixed and floating coupon rates. Fixed coupon rates are 13.25% and 12.75% while the floating coupon rate is 1.25% over the six-month gross Treasury bill rate.

The issue was structured and managed by the Investment Banking Division of BOC.

The demand received for this offering shows the continued trust and confidence placed in BOC by the investor community. Funds raised through this debenture will be injected into the country’s economic development through long-term lending in development projects.