ComBank’s Rs. 15 b Green Bond issue draws 160 applications worth Rs. 21.3 b

Monday, 11 August 2025 05:08 - - {{hitsCtrl.values.hits}}

The Commercial Bank’s Rs. 15 billion Green Bond issue has drawn 160 applications worth Rs. 21.3 billion.

The Green Bond issue comprised of an initial issue of 100 million Basel III compliant Tier 2 Listed, Rated, Unsecured, Subordinated, Redeemable, Green Bonds with a non-viability conversion feature at the par value of Rs. 100 each, to raise a sum of Rs. 10 billion; and an option to issue up to a further 50 million Green Bonds at the discretion of the bank, in the event of an oversubscription of the initial issue.

Limited to qualified investors, Commercial Bank’s Green Bonds were offered in six types with three tenors – Type A five year tenor (Fixed interest rate of 10.55% p.a. (AER 10.83%) payable semi-annually) and Type B five-year tenor (Fixed interest rate of 10.85% p.a. (AER 10.85%) payable annually) , Types C 7 year tenor (Fixed interest rate of 10.85) p.a. (AER 11.14%) payable semi-annually) and D 7 year tenor (Fixed interest rate of 11.15% p.a. (AER 11.15%) payable annually), Type E 10-year tenor (Fixed interest rate of 11.00% p.a. (AER 11.30%) payable semi-annually) and F 10-year tenor (Fixed interest rate of 11.30% p.a. (AER 11.30%) payable annually).

The biggest demand (Rs. 17.7 billion) was for Type B via 52 applications followed by Type A (Rs. 1.6 billion) via highest 69 applications. Type D received 14 applications worth Rs. 866 million, Type F received 14 applications worth Rs. 818 million, Type E six applications worth Rs. 250 million and Type C five applications worth Rs. 41 million.

Funds raised through the Bond Issue in compliance with requirements under Basel III, are expected to further improve the Capital Adequacy Ratio of the bank by increasing its Tier 2 Capital base.

Since the Bonds proposed to be issued are of a medium to long-term nature, being of tenures of 5, 7, and 10 years, the raising of funds through Bonds can be expected to reduce the maturity mismatches between medium to long-term Green Loans which are funded by short-term liabilities.

The bank intends to use the proceeds of the Bond Issue exclusively for financing or re-financing green projects as defined in the Sustainable Bond Framework of the bank (which is in line with the Green Bond Principles (GBP) 2021 issued by the International Capital Markets Association (ICMA) and Green Finance Taxonomy issued by the Central Bank of Sri Lanka).

The bank has developed a Sustainable Bond Framework providing a road map for issuing Sustainable Bonds and using the proceeds to fund green, blue, or social projects. The framework establishes the foundation for identifying, selecting, verifying, and reporting eligible sustainable financing opportunities that can be directly or indirectly financed through the bank’s Sustainable Bonds, as well as managing the associated proceeds. The bank’s Sustainable Bond Framework is based on the Green Bond Principles (GBP) 2021, Social Bond Principles (SBP) 2021, and Sustainability Bond Guidelines 2021 published by the International Capital Markets Association (ICMA).

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