Sri Lanka’s state bank, Bank of Ceylon’s proposed Rs. 8 billion debt issue, which the subscription list would be opened on coming Monday, will be oversubscribed within few hours of the opening, Bank officials expressed confidence.
“We are sure that the issue would be oversubscribed by 200-pct by 12 pm Monday”, P.A. Lionel, Senior DGM of the Bank told reporters in Colombo today.
“Sri Lankan investors, mainly the corporate sector, such as Sri Lanka Insurance Corporation and those who have excess liquidity will channel those money to us”, said Bank Chairman Razik Zarook.
He said the Bank has innovatively structured the latest unsecured, subordinated, redeemable debentures which has maturity periods, ranging from 5 to 10 years.
BOC has categorized the debt issue under nine categories ranging from A to I.
- The type ‘A’ debts will have a 5 year tenor with a fixed interest rate of 13-pct per annum on the principal sum.
- The type ‘B’ will have fixed interest rate of 12.60-pct per annum with payment coming bi-annually.
- Type ‘C’ will be 5 year tenor debentures, with the interest rate kept floating and paid bi-annually.
- Type ‘D’ debts will be of 8 years with a fixed interest rate of 13.25-pct and paid annually.
- There will be a 10 year tenor debt issued with the rate fixed at 13.75-pct and paid bi-annually.
“Actually, this is an opportunity for investors to lock the funds, longterm”, Lional added.
Once raised, the Bank is planning to utilize the funds to finance the long term financial needs of the priority sectors of the economy, such as infrastructure and tourism projects.
The debts which would be listed on the CSE have been given AA(Lka) rating by Fitch.
Sri Lanka BOC’s Rs. 8 bn. debt issue to be oversubscribed by 200-pct – Official
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Oleh
Lanka Stocks
