Fitch assigns ComBank’s Basel III sub debt up to Rs.10bn final ‘A(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 a final National Long-Term Rating of ‘A(lka)’. 

The final ratings are the same as the expected ratings assigned on 24 June 2021 (and subsequently affirmed on 3 August 2021) and follow the receipt of documents conforming to information already received. The proposed debentures, which have maturities of five and seven years and carry fixed coupons, will be listed on the Colombo Stock Exchange. 

The bank plans to use the proceeds to further strengthen its Tier 2 capital base, raise long-term funding and bridge maturity mismatches. 

The bank expects the proposed debentures to qualify as Basel III-compliant regulatory Tier 2 capital. They 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.