Wednesday 20 August 2014

BOC's Rs 8B debt rated 'AA'

Ceylon FT: State-banking giant Bank of Ceylon's proposed Rs 8 billion debenture was rated 'AA' yesterday (19) by Fitch Rating Lanka.

"The assignment of the final rating follows the receipt of final documents that conform to information previously received. The final rating is at the same level as the expected rating assigned on 3 July 2014," Fitch said.


"The debentures, which have tenors of five and eight years and carry fixed and floating coupons, 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 proposed debentures are rated one notch below BOC's National Long-Term Rating to reflect their subordination to senior unsecured creditors and gone-concern loss-absorption quality in the event of liquidation, in line with Fitch's criteria for rating such securities.

"Any change in Sri Lanka's sovereign rating (BB-/Stable) or the perception of State support to BOC could result in a change in BOC's National Long-Term rating and issue ratings," the ratings agency said.
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