Fitch Ratings has assigned Bank of Ceylon's (BOC) (CC/CCC-/A(lka)/Stable) proposed Basel III-compliant subordinated unsecured debentures of up to LKR10 billion an expected National Long-Term Rating of 'BBB+(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, bridge maturity mismatches, and to support the expansion of its asset base.
The bank expects the proposed debentures to 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 Monetary Board of the Central Bank of Sri Lanka.
The final rating is subject to the receipt of final documentation conforming to information already received.
The full statement is reproduced below.
Fitch-Rates-Bank-of-Ceylons-Basel-III-Subordinated-Debt-BBBEXPlka