Sri Lanka’s largest bank, the Bank of Ceylon is opening the subscription list of its 8th listed Rupee debenture issue on 21st December 2016. “Bank of Ceylon is the largest issuer of debentures in the Sri Lankan Debt market with over 77 years of trust, stability and leadership in the Sri Lankan banking industry, the Bank has successfully raised over Rs. 44 billion by issuing debentures in the market. During all those times the issue has been oversubscribed on the same day which showed the high level of investor confidence enjoyed by the Bank”, stated the Deputy General Manager- International, Treasury and Investments Mr. S.M.S.C. Jayasuriya.

Bank intends to utilize the proceeds of this issue to expand the loan book. During the first 9 months of 2016 the loan book has grown by Rs. 74 billion. Even though there are multiple sources of funds, such as different types of deposits and borrowings to fund the bank’s expansion strategy, mobilizing medium term funds through debentures would diversify bank’s funding mix. The other motive behind this issue is to expand the capital base of the bank to improve CAR and to manage the maturity mismatches in bank’s assets and liability portfolio.

Features of the 2016 Debenture Issue

This is a rated, unsecured, subordinated, redeemable debenture that will be listed on the Colombo Stock Exchange (CSE). The debenture is rated AA by Fitch Ratings Lanka Ltd, that is one notch below the BOC’s National Long-Term Rating of AA+ (lka)/stable.

The debenture issue is for an offering of Rs. 5 bn. with the option to increase it up to Rs. 8 bn. in the event of an oversubscription. The debentures are offered in four types to meet diverse investor requirements with five years and eight years maturities and fixed & floating coupon rates.

Fixed coupon rate of the five-year debenture will be 13.25 percent while the eight-year debenture will be 12.75 percent. Floating coupon rate of both five-year and eight-year debentures will be 1.25 percent above the six-month gross Treasury Bill rate.

The issue price of a debenture is Rs. 100 and an investor is required to invest in a minimum of 100 debentures (Rs. 10,000).

Benefits of Investing in the Debentures

BOC Debentures will provide the investors with an attractive interest income throughout the investment period. Investing in debentures will provide them the opportunity to diversify their investment portfolios.

As the debentures will be listed on the CSE there will be a secondary market for the investors and hence investors will be able to exit from the investment at any time, and could realize capital gains according to interest rate fluctuations in the financial markets. Further, investors will get the opportunity to obtain credit facilities from banks and financial institutions by offering their debentures as collateral.

Parties to the Debenture Issue

Similar to our previous issues, this 8th public debenture issue is also structured and managed by the Investment Banking Division of the bank. Legal Department acts as lawyers to the issue while Corporate Branch acts as bankers to the issue. Investment Banking Division continues to be the registrars for the proposed issue, while Deutsche Bank AG, Colombo branch is acting as the trustee to the issue.

Pricing of the Debenture

The debenture is priced considering the high credit worthiness indicated by the issue rating of AA affirmed by Fitch Ratings Lanka Ltd., the minimal risk involved in the investment and the strong franchise enjoyed by BOC.

How to apply for debentures

Applications and prospectus containing details of the debenture issue are now available at all trading members and the members (stock brokers) of the CSE and can be downloaded from the web sites of the CSE; www.cse.lk and the web site of BOC; www.boc.lk

Duly completed application forms should be enclosed in an envelope marked ‘BOC Debenture Issue’ together with the remittance for the full amount payable on application and delivered to Investment Banking Division at 11th Floor of BOC Head Office or collection points mentioned in the prospectus.

BOC’s role as bankers to the nation

During past years BOC made significant achievements in improving its balance sheet and overall performance. The Bank of Ceylon became the highest PBT earning single business entity in the country for 2014 and 2015 with record breaking Rs.25.3 billion PBT, a 25% growth over the previous year. The Bank concluded 2015 with yet another striking trillion which was the Rs.1.1 Trillion deposit base. BOC’s well established 628 branch network and other service points along with 650 ATMs and 122 CDM touch points plus presence in common ATM switch enabling more than 2000 touch points and technology driven transformation process carried out throughout the year drove the Bank’s achievements.

Leading the Sri Lankan Banking industry with over 77 years experience, the Bank of Ceylon has become the most stable and the trusted bank in the country that serves Sri Lankans from all walks of life helping them to build their lives and make themselves financially stable whilst uplifting the country’s economy. The Bank earned global recognition as one of the top 1000 banks in the world, (Country rank No.1) as listed by “The Banker Magazine” (UK) respectively in 2012, 2013, 2014, 2015 and 2016. The Bank claimed its award as the only Sri Lankan brand recognized as one of Asia’s Best Brands in 2013 by the Chief Marketing Officer’s Council (CMO Council) based in Mumbai, India. Brand Finance Lanka has ranked Bank of Ceylon as the country’s No. 1 brand for the last eight consecutive years. The Bank has passed exceptional milestones in recent years such as becoming the first to gain over Rs.1.6 Trillion assets and over Rs. One Trillion deposits. Focusing on the Banks achievement, ICRA (lk) awarded AAA rating which is the highest credit quality rating issued by ICRA Lanka. BOC won the merit award for Annual Report 2015 under state owned enterprises category at the Excellence in Integrated Reporting Awards – 2016 conducted by the Institute of Certified Management Accountants of Sri Lanka. “Asia’s Best Employer Brand” awards organized by Employer Brand Institute endorsed the BOC as one of those classed as a “Best Employer Brand” for the year 2016. The Bank of Ceylon maintains international presence with overseas branches in Chennai, Male, Seychelles
and a subsidiary in London.

Bank of Ceylon invites local and foreign investors to join hands with us by investing in debentures and contributing to the economic and social development of the country.