The debentures to the value of Rs 10 billion are being issued to further strengthen the Tier 2 capital base of the Bank, bridge maturity mismatches in the assets and liabilities portfolio of the Bank and raise funds for the expansion of the Bank’s lending portfolio, especially in segments such as Small and Medium Enterprises (SME) and export-oriented industries in the interest of supporting the national economy.
Commenting on the oversubscription of the Issue, Commercial Bank Managing Director/CEO Mr Sanath Manatunge said:
“The trust and confidence in the future prospects of the Bank implicit in the response of institutional as well as individual investors, is extremely encouraging for Commercial Bank as well as the sector in general.
This injection of capital further strengthens the Bank and is expected to further stimulate growth.”
Commercial Bank’s Basel III-compliant, Tier 2, Listed, Rated, Unsecured, Subordinated Redeemable Debentures with a Non-viability Conversion feature at the value of Rs 100 each were offered in three tenures – Type A with a five-year tenure, Type B with a seven-year tenure, and Type C with a 10-year tenure.
The five-year debentures carry a fixed interest rate of 28.00% p.a. (AER 29.96%) payable semi-annually, while the seven and 10-year debentures offer a fixed interest rate of 27.00% p.a. (AER 28.82%) and 22.00% p.a. (AER 23.21%) respectively, also payable semi-annually.
The debentures are rated A (lka) on Rating Watch Negative by Fitch Ratings Lanka Limited.
Commercial Bank’s National Long-Term Rating has been set at AA - (lka) / Rating Watch Negative by Fitch.
The Investment Banking Division of Commercial Bank of Ceylon PLC is the Manager to the Issue.
For the nine months ending September 2022 the Commercial Bank Group reported gross income of Rs 195.573 billion, total operating income of Rs 103.837 billion, profit before tax of Rs 22.036 billion and profit after tax of Rs 15.460 billion, with total assets reaching Rs 2.390 trillion, loans and advances totalling Rs 1.243 trillion and total deposits exceeding Rs 1.853 trillion as at 30th September 2022.