ComBank’s Rs 6 bn Debenture Issue opens on Dec. 12

The Colombo Stock Exchange (CSE) has approved in principle the listing of Commercial Bank of Ceylon’s Rs 6 billion Debenture Issue opening on Tuesday December 12, 2023.

The Bank has announced an initial issue of 60 million Basel III Compliant – Tier 2 Listed Rated Unsecured Subordinated Redeemable Debentures with a Non-Viability Conversion feature, at the par value of Rs 100 each, to raise Rs 6 billion, with an option to issue up to another 60 million Debentures to raise an additional Rs 6 billion at the discretion of the Bank in the event of an over-subscription of the initial issue.

The Bank said the issue will further strengthen its Tier II capital base, raise funds for the expansion of its lending portfolio, and bridge maturity mismatches in the assets and liabilities portfolio of the Bank.

The Debentures will be offered in three tenures – Types A and B with a five-year tenure, Types C and D with a seven-year tenure, and Types E and F with a 10-year tenure, the Bank said.

Type A will carry a fixed interest rate of 14.50%. p.a. (AER 15.03%) payable semi-annually; Type B 15.00% p.a. (AER 15.00%) payable annually; Type C 13.75% p.a. (AER 14.22%) payable semi-annually; Type D 14.25% (AER 14.25%) payable annually; Type E 13.50% p.a. (AER 13.96%) payable semi-annually; and Type F 14.00% (AER 14.00%) payable annually.

The minimum subscription per application for an individual Qualified Investor is set at Rs 5 million, and the minimum subscription per application for other Qualified Investors at Rs 10,000 or 100 Debentures.

The Debentures are rated BBB+(lka) by Fitch Ratings Lanka Limited. The Investment Banking Division of Commercial Bank of Ceylon PLC is the Manager to the Issue. For the nine months ending September 2023 the Commercial Bank Group reported gross income of Rs 255.963 billion.

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