Commercial Bank opens Rs.20bn debenture issue on July 16

Commercial Bank of Ceylon PLC is set to raise up to Rs.20 billion through a Basel III-compliant subordinated debenture issue, after receiving the approval in principle from the Colombo Stock Exchange for the listing of the securities.

The bank will initially offer 100 million listed, rated, unsecured, subordinated and redeemable debentures, at a par value of Rs.100 each. The issue carries a non-viability conversion feature, in line with the Basel III capital requirements.

The bank has the option to issue a further 50 million debentures in the event of an oversubscription and an additional 50 million debentures thereafter, allowing it to raise a maximum of Rs.20 billion.

The offering comprises six categories of fixed-rate debentures, with tenures of five, seven and 10 years.

The five-year debentures offer annual effective returns of 13.00 percent, while the seven-year and 10-year instruments provide annual effective returns of 13.25 percent. The interest will be paid either annually or semi-annually, depending on the tranche selected by the investors.

Subscription for the debentures will open on July 16, 2026. Commercial Bank’s Investment Banking Unit will act as the manager to the issue, while SSP Corporate Services (Private) Limited has been appointed as the registrar to the issue.

The funds raised are expected to strengthen the bank’s Tier 2 capital base and support compliance with the Basel III regulatory capital requirements.