BoC debenture issue oversubscribed

The Bank of Ceylon (BoC) Debenture Issue 2013 which opened for subscription on October 21, attracted unprecedented interest among investors with total bid value surpassing Rs. 20 billion on the opening day, forcing the bank to close the issue on the same day.

The initial offer was for Rs. 4 billion with room to upsize to Rs. 8 billion in the event of over-subscription. However, the value of bids received was more than 250 percent of Rs. 8 billion as predicted by senior managers of the Bank.

The majority of the applications for five-year and 10-year fixed rate categories. Retail investors showed interest in the five-year fixed category while insurance companies and pension funds were prominent among the investors who showed interest in long term (10-year) debentures with bids totalling Rs. 11.6 billion which was more than 50% of the total value of the applications received.

"This trend augurs well for future capital market development in which the BoC expects to play a key role," a bank spokesman said.

"The bank will use a part of the funds raised to retire maturing debentures and the rest will be used for long term infrastructure project financing," he said.