The Rs. 10 billion Basel III compliant, Tier II, listed, rated, unsecured, subordinated, redeemable debenture issue of the Commercial Bank have been snapped up, prompting the closure of the offer on its official opening yesterday.
It offered 50 million Basel III compliant - Tier 2, Listed, Rated, Unsecured, Subordinated, and Redeemable Debentures with a Non-Viability Conversion, with an option to issue up to a further 50 million Debentures, in the event of an oversubscription of the initial issue. The par value of the debenture will be Rs. 100.
The debentures offered in two tenures – Type A with a five-year tenure and Type B with a 10-year tenure. The five-year debentures will carry a fixed interest rate of 12.00% p.a. (AER 12.36%) payable semi-annually, while the 10-year debenture will offer a fixed interest rate of 12.50% p.a. (AER 12.89%), also payable semi-annually.
The funds raised through this issue would strengthen the bank’s lending portfolio, improve the Tier 2 capital base and reduce maturity gaps in the assets and liabilities of the bank.
The debentures are rated AA- (lka) by Fitch Ratings Lanka Ltd. Commercial Bank’s National Long-Term Rating has been affirmed at AA (lka)/Stable by Fitch Ratings Lanka Ltd. The Investment Banking Division of Commercial Bank of Ceylon is the Manager to the Issue.