ComBank’s Rs.10bn debenture issue opens on July 2

The Colombo Stock Exchange (CSE) has approved in principle the listing of Commercial Bank of Ceylon PLC’s Rs.10 billion debenture issue, opening on Tuesday, July 2, 2024.

The bank has announced an initial issue of 100 million Basel III-compliant Tier 2 listed rated unsecured subordinated redeemable debentures, with a non-viability conversion feature, at the par value of Rs.100 each, to raise a sum of Rs.10 billion, with an option to issue up to a further 50 million debentures, at the discretion of the bank, in the event of an oversubscription of the initial issue and with a further option to issue up to a further 50 million debentures, at the discretion of the bank, in the event of an oversubscription of the initial issue and second tranche.

The bank said the issue will 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.

Limited to qualified investors, the debentures will be offered in six types, with three tenures – Types A and B with a five-year tenure, Types C and D with a seven-year tenure and Types E and F with a 10-year tenure, the bank said.
Type A will carry a fixed interest rate of 12.60 percent p.a. (AER 13.00 percent) payable semi-annually, Type B 13.00 percent p.a. (AER 13.00 percent) payable annually, Type C 12.85 percent p.a. (AER 13.26 percent) payable semi-annually, Type D 13.25 percent p.a. (AER 13.25 percent) payable annually, Type E 13.00 percent p.a. (AER 13.42 percent) payable semi-annually and Type F 13.50 percent p.a. (AER 13.50 percent) payable annually. The minimum subscription per application for an individual qualified investor is set at Rs.5 million and the minimum subscription per application for other qualified investors is at Rs.10,000 or 100 debentures. 

The debentures are rated BBB+ (lka) by Fitch Ratings Lanka Limited. The Investment Banking Division of Commercial Bank of Ceylon PLC is the manager to the issue.
For the three months ending March 31, 2024, the Commercial Bank group reported a gross income of Rs.80.208 billion, total operating income of Rs.34.947 billion, profit before tax of Rs.16.738 billion and profit after tax of Rs.10.808 billion, with total assets reaching Rs.2.616 trillion, loans and advances totalling Rs.1.316 trillion and total deposits exceeding Rs.2.141 trillion.