Commercial Bank of Ceylon’s second issue of debentures for 2016 opens on Monday, October 24.
The bank is seeking to raise Rs.5 billion with an option to increase it by a further Rs.2 billion to strengthen its Tier II capital and to raise long-term funds for expansion.
The listed, rated, unsecured, subordinated, redeemable debentures in the denomination of Rs.100 will be offered in two tenures – Type A with a five-year tenure and Type B with a 10-year tenure, the bank said.
The five-year debentures will carry a fixed interest rate of 12.00 percent p.a. (AER 12.36 percent) payable semi-annually, while the 10-year debentures will offer a fixed interest rate of 12.25 percent p.a. (AER 12.63 percent), also payable semi-annually. The minimum subscription per application is Rs.10,000 or 100 debentures. Applications in excess of the minimum subscription should be in multiples of Rs.10,000 or 100 debentures.
The debentures are rated AA- (lka) by Fitch Ratings Lanka Limited. Commercial Bank’s national long-term rating has been affirmed at AA (lka)/Stable by Fitch Ratings Lanka Limited. The Investment Banking Division of Commercial Bank of Ceylon PLC is the manager to the issue.
More details of the debenture issue can be obtained from the prospectus on the bank’s website www.combank.lk and the Colombo Stock Exchange’s website www.cse.lk and are available at all stockbrokers.
The issue will close in 14 market days of its opening date unless oversubscribed before the closing date. Commercial Bank reported profit before tax of Rs.8.895 billion and profit after tax of Rs.6.488 billion for the six months ending June 30, 2016 on gross income of Rs.42.935 billion. Total assets of the bank stood at Rs.930.374 billion at that date, while the capital adequacy ratios at the end of June 2016 were 11.91 percent for Tier I and 15.43 percent for Tier I and Tier II, both well above the statutory minimum requirement of 5 percent and 10 percent, respectively.