Bank of Ceylon is opening largest ever Sustainability Bond Issue to expand green and social lending

Sri Lanka's financial sector is steadily moving toward instruments that meet both economic and developmental goals, especially as the country deepens its focus on environmental stewardship and inclusive growth.

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The Bank of Ceylon (BOC) is opening the largest ever Sustainability Bond issue on 22 December 2025, intended to expand lending to projects that deliver measurable environmental and social impact while strengthening its capital position.

Given the significance of the issue and its alignment with the growing market for sustainable finance, this Q&A provides a clear breakdown of the mechanics, purposes and processes behind BOC's latest initiative.

What is BOC planning to issue, and what are the key features of this instrument?

We are planning to issue a listed, rated, unsecured, subordinated, redeemable five-year Sustainability Bond, fully compliant with Basel III Tier II regulations and incorporating a non-viability write-down mechanism. The bonds will be denominated in Sri Lankan Rupees and listed on the Colombo Stock Exchange. Investors may choose between two interest options: a fixed rate of 10.50% per annum or a floating rate priced at two percentage points above the weighted average 12-month Treasury bill rate, reset annually. For both types, interest will be paid once a year. The instrument carries an issue rating of AA- (Stable) from Lanka Rating Agency, while BOC's issuer rating stands at AA-(lka)/Stable from Fitch Ratings Lanka.

The minimum subscription for qualified investors is Rs. 10,000, while individual investors are required to apply for at least Rs. 5 million.

How much does the Bank intend to raise, and how is the offering structured?