ComBank’s Rs. 5 b debenture issue to open on 1 December

Tuesday, 22 November 2022 01:08 - - {{hitsCtrl.values.hits}}

The Commercial Bank of Ceylon’s Rs. 5 billion debenture issue will open on Thursday 1 December 2022, offering investors an opportunity to profit from the growth of the bank.

The Bank has announced plans to raise Rs. 5 billion via 50 million Basel III-compliant debentures with an option to increase it by another Rs. 5 billion in the event of an oversubscription, to 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 Basel III-compliant, Tier 2, Listed, Rated, Unsecured, Subordinated Redeemable Debentures with a Non-viability Conversion at the value of Rs. 100 each will be 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 Bank said.

The five-year debentures will carry a fixed interest rate of 28.00% p.a. (AER 29.96%) payable semi-annually, while the seven and 10-year debentures will offer a fixed interest rate of 27.00% p.a. (AER 28.82%) and 22.00% p.a. (AER23.21%) respectively, also payable semi-annually.

While the minimum subscription per application for an individual qualified investor is set at Rs. 5 million, the minimum subscription per application for other qualified investors will be Rs. 10,000 or 100 debentures.

The debentures are rated A (lka) on Rating Watch Negative by Fitch Ratings Lanka Ltd. 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 30 September 2022.