Sri Lanka’s BoC to open subscription for Rs8 bn debenture

Dec 20, 2016 (LBO) – Sri Lanka’s state run Bank of Ceylon is opening the subscription list of its 8th listed Rupee debenture issue on 21st December 2016.

Bank intends to utilize the proceeds of this issue to expand the loan book.

During the first nine months of 2016 the loan book has grown by 74 billion rupees.

Even though there are multiple sources of funds, such as different types of deposits and borrowings to fund the bank’s expansion strategy, mobilizing medium term funds through debentures would diversify bank’s funding mix, the Bank said in a statement.

“The other motive behind this issue is to expand the capital base of the bank to improve CAR and to manage the maturity mismatches in bank’s assets and liability portfolio.”

The debenture issue is for an offering of five billion rupees with the option to increase it up to eight billion rupees in the event of an over subscription.

The debentures are offered in four types to meet diverse investor requirements with five years and eight years maturities and fixed & floating coupon rates.

Fixed coupon rate of the five-year debenture will be 13.25 percent while the eight-year debenture will be 12.75 percent. Floating coupon rate of both five-year and eight-year debentures will be 1.25 percent above the six-month gross Treasury Bill rate.

The issue price of a debenture is Rs. 100 and an investor is required to invest in a minimum of 100 debentures (Rs. 10,000).