Big corporates, small investors subscribe to Rs.6bn BOC debenture

The biggest ever debenture issue made by a financial institution in Sri Lanka was subscribed by country’s large corporates and small investors representing a cross section of the society.

The Rs.6 billion debenture issue by the state-controlled banking giant Bank of Ceylon (BoC) was fully subscribed as of last Friday, thirteen days ahead of the scheduled closing date of December 5, 2012, the bank said in a statement.

This debenture issue was initially made for Rs.3 billion which was over-subscribed on the same day, and in keeping with the overwhelming demand from the general public the issue was kept opened for another Rs.3 billion to read the total issue as Rs.6.0 billion. The higher appetite of investors has been for the fixed interest rate option.

This debenture issue is the fourth successful listed rupee debenture issue made by the bank .The success of this debenture issue is a testimony to the trust of the public on stability and capacity of the Bank of Ceylon being the market leader in most of vital areas of banking.

The successful issue of this debenture enables the bank to increase tier11 capital in terms of Basel-11, strengthen the capital base, enhance the single borrower limit, minimize the interest rate risk and gap exposures in the bank’s assets /liability portfolio, reduce dependency on volatile short-term borrowings. Above all, the long term fund base raised through this successful debenture issue could effectively be utilized to finance the long term financial needs in the priority sectors of the country’s economy such as exports, agriculture, tourism, infrastructure/manufacturing industry and SME etc.

Bank of Ceylon (BOC) is one of Sri Lanka’s top banks with largest asset base, largest loan book, largest deposit base and highest profit and having branches in Chennai, Male and operations in London through its subsidiary, and is the leader in inward remittances having 860 foreign correspondents in every continent and representative in selected countries while claiming more than 50% market share in Treasury operations. BOC recorded Rs 16.29 billion profit before tax for the first nine months of the year 2012 which is a growth of 62.0% over the same period in the year 2011.