ComBank debenture draws applications worth Rs. 8.6 b

The Commercial Bank’s latest listed debenture issue had drawn 120 applications with a demand for Rs. 8.6 billion. 

The bank issued 50 million Basel III compliant Tier 2, listed, rated, unsecured, subordinated, redeemable debentures with a non-viability conversion feature at Rs. 100 each with an option to offer a further 50 million debentures in the event of an oversubscription.

The debentures were of two types – Type A, a five-year instrument with a fixed coupon rate of 9% per annum (Annual Effective Rate of 9.2%) payable semi-annually; and Type B, a six-year instrument with fixed coupon rate of 9.50% per annum (AER of 9.73%) payable semi-annually. 

When the issue closed last week, Type A had drawn 101 applications worth Rs. 4.23 billion and Type B demand amounted to 19 applications worth Rs. 4.35 billion.

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

The entire quantum of funds raised through the debenture issue will be utilised to finance expansion by increasing the lending portfolio of the bank within six months from the date of allotment.