Fitch rates BOC’s Basel III subordinated debt ‘A(EXP)(lka)’

Fitch Ratings yesterday assigned Bank of Ceylon’s (BOC) (CCC+/CCC+/AA-(lka)/Stable) proposed Basel III-compliant subordinated unsecured debentures of up to Rs.15 billion an expected National Long-Term Rating of ‘A(EXP)(lka)’.

The proposed debentures will mature in five years and be listed on the Colombo Stock Exchange. The bank plans to use the proceeds to strengthen its Tier 2 capital base and liquidity position, bridge maturity mismatches and support the expansion of its asset base.

The proposed debentures will qualify as Basel III-compliant regulatory Tier 2 capital. The debentures include a non-viability clause whereby the notes will be converted to an Additional Tier 1 (AT1) instrument on a permanent basis, subject to the occurrence of a trigger event, as determined by the Governing Board of the Central Bank of Sri Lanka.

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