Debt Sale

CEAT Kelani Holdings Managing Director Ravi Dadlani (right) and Lanka Ashok Leyland CEO Umesh Gautham exchange the OEM agreement

Sept 12, 2013 (LBO) – Sri Lanka’s state-run Bank of Ceylon will sell 8.0 billion rupees of junior debt to boost regulatory capital. Fitch Ratings said it had given the debt an ‘AA(lka)’ expected rating.

The bond is rated one notch below Bank of Ceylon’s national rating of ‘AA+(lka)’ because as regulatory Tier II debt the funds will be used to pay off senior debt like depositors in the event of a liquidation.

The full statement is reproduced below:-

Fitch Rates Bank of Ceylon’s Subordinated Debt ‘AA(lka)(EXP)’ Ratings Endorsement Policy

12 Sep 2013 3:14 AM (EDT) Fitch Ratings-Colombo/Mumbai/Singapore-12 September 2013: Fitch Ratings Lanka has assigned Bank of Ceylon’s (BOC; BB-/Stable) proposed subordinated debentures of up to LKR8bn an expected National Long-Term rating of ‘AA(lka)(EXP)’.

The debentures are to be listed on the Colombo Stock Exchange. BOC expects to use the proceeds to strengthen the bank’s regulatory Tier 2 capital base and reduce asset and liability maturity mismatches.

The final rating is pending final documents that confirm information already received, inclu

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