Fitch gives Ceylon bank notes BBB+(lka)

Fitch Ratings said it assigned Bank of Ceylon's planned Basel III-compliant five-year subordinated unsecured debentures of up to LKR 10 billion an expected national long-term rating of BBB+(lka).

“BOC's Sri Lankan rupee-denominated subordinated debt is rated two notches below the bank's national long-term rating anchor. This reflects Fitch's baseline notching for loss severity for this type of debt, and our expectations of poor recoveries upon non-performance,” the agency said in a press release.

The bank plans to use the proceeds to strengthen its tier 2 capital base, bridge maturity mismatches and support its asset base's expansion.

The outlook is stable.

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