COMBank’s Rs. 12 b debentures with 6 interest rate options up for grabs

The Commercial Bank of Ceylon PLC’s Rs. 12 billion debenture issue with six interest rate options is up for grabs from today.

The Bank is issuing 60 million BASEL III compliant Tier 2 listed, rated, unsecured, subordinated, redeemable debentures with a non-viability conversion feature debentures at Rs. 100 each to raise Rs. 6 billion with an option to issue a further 60 million such debentures at the discretion of the Bank in the event of an oversubscription of the initial issue. 

Maximum issue of debentures will not exceed 120 million debentures worth Rs. 12 billion.

The issue has six interest rate options. 

Type A is five year tenor and fixed coupon rate of 14.50% per annum (AER) of 15.03% payable semi-annually. Type B is 5 year tenor and fixed coupon rate of 15% per annum (AER 15%) payable annually. Type C is 7 year tenor and fixed coupon rate of 13.75% per annum (AER 14.22%) payable semi-annually. Type D is 7 year tenor and fixed coupon rate of 14.25% per annum (AER 14.25%) payable annually. Type E is 10 year tenor and fixed coupon rate of 13.50% per annum (PER 13.96%) payable semi-annually and Type F is 10 year tenor fixed coupon rate of 14% (AER 14%) payable annually. 

The issue opens officially on 12 December but can be subscribed from now on.

Managers to the issue is Commercial Bank’s Investment Banking Unit.

Funds raised through the Debenture Issue in compliance with requirements under Basel III, are expected to further improve the Capital Adequacy Ratio of the Bank by increasing its Tier 2 Capital base. The Bank intends to lend the proceeds of the Debenture Issue, and thereby expand the Bank’s loan book in the ordinary course of business over a period of Twelve (12) months, such period commencing from the Date of Allotment of the Debentures, with the expected revival of economic activities.