Fitch rates BOC’s Basel III sub-debt up to Rs.8bn ‘AA(lka)(EXP)’

Fitch Ratings has assigned Bank of Ceylon’s (BOC,AA+(lka)/Stable) proposed Sri Lanka rupee-denominated Basel III-compliant subordinated unsecured debentures an expected national long-term rating of ‘AA(lka)(EXP)’. The debentures, totalling up to Rs.8 billion, 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 draft terms indicate that the notes are subject to temporary partial or full write-down upon the occurrence of a trigger event. There are no equity conversion provisions in the terms.

The final rating is subject to the receipt of final documentation conforming to information already received.