Sept 27, 2013 (LBO) – Sri Lanka’s state-run Bank of Ceylon is to raise 8.0 billion rupees through subordinated debt, Fitch Ratings said giving a rating of ‘AA(lka)’, one notch below its national rating. The bank will sell debentures up to 10 years with fixed and floating coupons.
The full statement is reproduced below
Fitch Rates Bank of Ceylon’s Subordinated Debt Final ‘AA(lka)’ Ratings Endorsement Policy
26 Sep 2013 6:51 AM (EDT) Fitch Ratings-Colombo/Mumbai/Singapore-26 September 2013: Fitch Ratings Lanka has assigned Bank of Ceylon’s (BOC; BB-/Stable) proposed subordinated debentures of up to LKR8bn a final National Long-Term Rating of ‘AA(lka)’. The debentures have tenors of up to 10 years with fixed and floating coupons.
The assignment of the final rating follows the receipt of final documents, which conform to information previously received. The final rating is at the same level as the expected rating assigned on 12 September 2013.
KEY RATING DRIVERS
The proposed debentures are rated one notch below BOC’s National Long-Term Rating of ‘AA+(lka)’ to reflect their gone-concern loss-absorption quality in the event of a liquidation, in line with Fitch’s criteria for rating such securities.
The subordinated debt rating will move in tandem with the Long-Term Ratings. Any change in Sri Lanka’s rating or the perception of state support to BOC could result in a change in BOC’s National Long-Term Ratings.