The Commercial Bank of Ceylon PLC has announced plans to raise Rs 5 billion, with an option to raise up to a further Rs. 5 billion in the event of an over-subscription, for its capital through a Basel III compliant debenture issue that opens on July 16 2018, offering qualified investors an opportunity to invest in the growth of Sri Lanka’s benchmark private bank.
Applications for the debentures are accepted from now on. The Bank said it will make an initial issue of 50 million Basel III compliant - Tier 2, Listed, Rated, Unsecured, Subordinated, Redeemable Debentures with a Non-Viability Conversion, with an option to issue up to a further 50 million Debentures, in the event of an over subscription of the initial issue. The par value of the debenture will be Rs 100.
The funds raised through this issue would strengthen the Bank’s lending portfolio, improve the Tier 2 capital base and reduce maturity gaps in the assets and liabilities of the Bank. 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.
The Debenture Issue is open to Qualified Investors only, as defined in the Prospectus. Investment and secondary market trading is limited to qualified investors.
The minimum subscription per application is Rs. 10,000 (100 Debentures) other than in the case of individual Qualified Investors. The minimum subscription requirement for an individual Qualified Investor applying for Basel III compliant Debt Securities shall be Rs. 5 million. Applications in excess of the minimum subscription shall be in multiples of Rs. 10,000 (100 Debentures).
The debentures will be offered in two tenures Type A with five year tenure and Type B with 10 year tenure, the Bank said.
The five-year debentures will carry a fixed interest rate of 12.00% p.a. (AER 12.36%) payable semi-annually, while the ten-year debenture will offer a fixed interest rate of 12.50% p.a. (AER 12.89%), also payable semi-annually.
Commercial Bank’s overseas operations encompass Bangladesh, where the Bank operates 19 outlets, Myanmar, where it has a Representative Office in Yangon, the Maldives, where the Bank has a fully-fledged Tier I Bank with a majority stake and Italy, where the Bank operates its own money transfer service.
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