Fitch Ratings Lanka has assigned Commercial Bank of Ceylon PLC’s (AA(lka)/Stable) proposed Basel II-compliant subordinated debentures of up to Rs.7 billion an expected National Long-Term Rating of ‘AA-(lka)(EXP)’.
The proposed issuance, which will have tenors of five and ten years and carry fixed coupons, will be listed on the Colombo Stock Exchange.
The bank expects to use the proceeds to strengthen its Tier 2 capital base and reduce asset-and-liability maturity mismatches.
The final rating is subject to the receipt of final documentation conforming to information already received. The proposed subordinated debentures are rated one notch below Commercial Bank’s National Long-Term Rating, to reflect the subordination to senior unsecured creditors.
The issuer rating is driven by the bank’s measured risk appetite, solid franchise, sound track record, and strong funding profile.
The rating on the proposed debentures will move in tandem with the bank’s National Long-Term Ratings.
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