Fitch rates Commercial Bank’s Basel III subordinated debt ‘A(EXP)(lka)’

Fitch Ratings has assigned Commercial Bank of Ceylon PLC’s (CB, AA-(lka)/Stable) proposed Sri Lankan rupee-denominated Basel III-compliant subordinated debentures of up to Rs.10 billion an expected national long-term rating of ‘A(EXP)(lka)’. 

The debentures, which have maturities of five and seven years, will be listed on the Colombo Stock Exchange. 
The bank plans to use the proceeds to further strengthen its Tier II capital base, raise long-term funding and bridge maturity mismatches.

The bank expects the debentures to qualify as Basel III-compliant regulatory Tier II capital. The notes include a non-viability clause whereby they will convert to ordinary voting shares, subject to the occurrence of a trigger event, as determined by the Monetary Board of Sri Lanka. 

The final rating is subject to the receipt of final documentation conforming to information already received.