Sri Lanka’s Commercial Bank to list 13.25-pct debentures as part of a Rs.20 billion fundraising programme after receiving in-principle approval from the Colombo Stock Exchange, with subscriptions set to open this week.
Sri Lanka’s Commercial Bank to list 13.25-pct debentures worth Rs.20 billion
Commercial Bank of Ceylon PLC has announced plans to issue Rs.20 billion worth of Basel III compliant debentures, offering investors fixed-income investment opportunities while strengthening the bank’s regulatory capital base.
According to a filing with the Colombo Stock Exchange, the bank will issue 200 million listed, rated, unsecured subordinated, redeemable debentures with a non-viability conversion feature. The securities will carry interest rates of 13.00 percent and 13.25 percent, providing investors with two fixed-rate investment options.
The proposed issue has already received in-principle approval from the Colombo Stock Exchange, allowing the bank to proceed with the public offering subject to the applicable regulatory requirements.
The initial offering will comprise 100 million debentures, each priced at Rs.100, raising up to Rs.10 billion. In addition, Commercial Bank has the option to issue a further 50 million debentures, with another 50 million available if the initial offer is oversubscribed. This would bring the total issue size to 200 million debentures, equivalent to Rs.20 billion.
The Sri Lanka’s Commercial Bank to list 13.25-pct debentures programme is structured to comply with Basel III compliant debentures requirements, which are designed to strengthen banks’ capital positions and enhance financial sector resilience. Such subordinated debt instruments are commonly used by banks to meet regulatory capital standards while offering investors predictable returns.
The debentures will also include a non-viability conversion feature, a standard Basel III requirement that enables regulatory authorities to convert eligible capital instruments into equity or write them down if a financial institution becomes non-viable. The mechanism is intended to improve the stability of the banking system during periods of financial stress.
Investor interest in corporate debt securities has remained steady in Sri Lanka as fixed-income instruments continue to attract those seeking regular returns amid evolving market conditions. Listed debentures issued by leading financial institutions are generally regarded as an important source of long-term funding while providing investors with access to capital market products.
Commercial Bank said the subscription list will open on 16 July, allowing eligible investors to apply for the offering. Market participants will be watching the subscription closely, particularly given the bank’s strong market presence and the size of the proposed issue.
The Sri Lanka’s Commercial Bank to list 13.25-pct debentures announcement adds to activity in Sri Lanka’s capital market, where banks and financial institutions continue to raise long-term funds through debt securities listed on the Colombo Stock Exchange. The successful completion of the issue is expected to further support the bank’s capital adequacy while broadening investment opportunities for the public.