BOC to raise up to Rs.8bn beef up capital base

State-owned banking giant Bank of Ceylon (BOC) is to raise up to Rs.8 billion through a listed debenture issue to fulfil the Basel III capital requirements.

The subordinated unsecured debentures have been assigned the national long-term rating of ‘AA(lka)’ by Fitch Rating.   

The debentures are to have maturities of five and eight years and carry fixed- and floating-rate coupons. 

The bank plans to use the proceeds to support its loan book expansion and to strengthen its Tier II capital base. The debentures are to be listed on the Colombo Stock Exchange.  

“The debentures are to qualify as Basel III compliant regulatory Tier II capital for the bank and include a non-viability trigger upon the occurrence of a trigger event, as determined by the Monetary Board of Sri Lanka. 

The final terms indicate that the notes are subject to temporary or permanent write-down as determined by the Monetary Board of Sri Lanka and can be partially or fully written down upon the occurrence of a trigger event. There are no equity conversion provisions in the terms,” Fitch Ratings said.