BOC makes history raising US $ 1bn in 12 months

10 April 2013 03:35 am - 0     - {{hitsCtrl.values.hits}}

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Bank of Ceylon (BOC) launched its second US $ 500 billion, 5-year Bond issue within a space of 12 months, drawing subscriptions exceeding US $ 2 billion and close to seven times the amount targeted, official sources said.

The notes were priced at a yield of 5.3 percent and in line with BOC’s long-term funding strategy of diversifying funding sources, and establishing its credit curve in the international bond markets.

The sole book runner and sole lead-manager for the offer was UBS AG, Singapore Branch.

BOC stated that the offering was highly successful following an intra-day book building exercise, and attracted diverse participation with over 140 investors placing orders.

The offering saw strong participation from a range of high quality institutional and private banking investors, with the granular split demonstrating the wide appeal of the BOC credit.

Asian investors took 74 percent of allocations, with European investors accounting for the remainder. By type, fund managers received 55 percent of the allocation, private banks 37 percent, banks 3 percent and corporate/others 8 percent.

BOC and UBS were very confident of the success of this issue and thus decided to launch it on a Reg. S only format excluding US onshore investors. This transaction was concluded with only one security rating, one international transaction counsel and no road show.

According to the bank, the overwhelming success of this issue, once again reflected the confidence placed by the international investor community on Sri Lanka in general and BOC in particular.

When comparing the yield of 6.875 percent achieved on the previous note due 2017, the new issue was priced at a yield that was more than 150 bps lower. The Notes are rated by Fitch Ratings at BB- which is similar to the ratings received for our previous issue. “This transaction marks our second issuance in the USD bond market, and we are pleased to have captured a strong market window with this benchmark offering. We are also encouraged by the strong response and the broad participation by both international investors and private banks,” Head of International, Treasury and Investment Banking P.A. Lionel said.

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