Bank of Ceylon (BOC) the largest bank and the market leader in the financial services sector in Sri Lanka launched a private placement of Basel III Compliant, Unlisted, Unsecured, Subordinated, Perpetual, Additional Tier I Capital Bond issue with Non-Viability Write Down features. The amount to be raised was Rs. 3 billion with an option to issue up to a further Rs. 2 billion in the event of over subscription of the initial issue. This bond issue is approved by the Securities & Exchange Commission of Sri Lanka and Central Bank of Sri Lanka.
This is a novel debt instrument to the Sri Lankan debt capital market. The Bonds are not listed on the Colombo Stock Exchange and confined to qualified investors. The Bonds are irredeemable and may be callable by the Bank at its discretion at any time after expiry of 5 years from the date of issue subject to approval of the Central Bank of Sri Lanka. The Bonds carry a floating interest rate of 12 month net Treasury bill rate + 1.5% p.a. with a floor rate of 9.5% p.a.
The long term funds raised through this Bond issue will be utilized for the long term financial needs of the priority sector of the economy while strengthening the Tier I Capital of the Bank. BOC’s customer base ranging from retail customers to large private and public sector enterprises coupled with BOC’s large branch network will provide a solid platform to utilize the funds profitably and efficiently.
BOC is a premier financial institution of the country with an unparalleled track record of eight decades in driving the country’s socio-economic development through partnering the growth of individuals, businesses and the Government by providing access to finance and safeguarding public interest. BOC accounts for 19% and 22% respectively of the banking industry’s assets and deposits and thereby is the largest bank in the country. As a fully state owned, domestic systemically important bank, BOC’s role extends beyond that of mere financial intermediation and its impact on the economic and social fabric of Sri Lanka is unmatched. BOC is rated AA+ (lka) by Fitch Ratings Lanka Ltd and (SL) AAA by ICRA Lanka Ltd.
BOC has many landmark achievements in the fund raising arena, public and private and in domestic and foreign markets. As of date BOC has raised Rs. 84.21 billion locally by issuing listed and unlisted debentures and US$1 billion through issue of International Bonds in 2012/13 in overseas markets.
The private placement of Basel III Compliant, Unlisted, Unsecured, Subordinated, Perpetual, Additional Tier I Capital Bond issue of BOC opened on 25th June 2020 and subsequently closed on 3rd July 2020 as it was fully subscribed. The Managers and Registrars for this bond issue is the Investment Banking Division of Bank of Ceylon.
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