Fitch assigns Commercial Bank’s Basel III Subordinated Debt Final ‘BBB+(lka)’
Fitch Ratings has assigned Commercial Bank of Ceylon PLC’s (COMB, A(lka)/Stable) proposed Sri Lankan rupee-denominated Basel III-compliant subordinated debentures of up to LKR 20 billion a final National Long-TermRating of ‘BBB+(lka)’.
The final rating is the same as the expected rating assigned on 15, February 2024 andfollows the receipt of documents conforming to information already received. The proposed debentures will mature in five, seven and 10 years and will be listed on the Colombo Stock Exchange. COMB plans to use the proceeds to further strengthen its Tier 2 capital base, reduce maturity mismatches in the balance sheet and support loan growth. The bank expects the proposed debentures to qualify as Basel III-compliant regulatory.
The debentures include a non-viability clause whereby they convert toordinary voting shares upon the occurrence of a trigger event, as determined by theMonetary Board of Sri Lanka.
COMB’s Sri Lankan rupee-denominated subordinated debt is rated two notches below thebank’s National Long-Term Rating anchor. This reflects Fitch’s baseline notching for lossseverity for this type of debt and expectation of poor recoveries.
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