Sri Lanka’s Commercial Bank to raise Rs. 1.5 bn in debt

Sri Lanka's Commercial Bank of Ceylon is privately raising up to Rs. 1.5 billion through a five-year unsecured subordinated debenture to feed its medium term credit expansion, officials said Tuesday. Sri Lanka's Commercial Bank of Ceylon is privately raising up to Rs. 1.5 billion through a five-year unsecured subordinated debenture to feed its medium term credit expansion, officials said Tuesday. "We have medium funding needs for programmes such as leasing," Commercial Bank's Senior Deputy General Manager (Finance & Planning), Ranjith Samaranayake told LBO.

Commercial Bank is involved in personal banking, trade finance, corporate lending, offshore banking and dealing in Sri Lankan government treasury bills.

The bank initially plans to raise Rs. 1.0 billion with an option to raise Rs. 500 million more in the event of an oversubscription.

The issue, which comes out in October, will be listed on the Colombo Stock Exchange through an introduction.

"The stock exchange introduction will come six months after the date of issue. We also have the option to rate (credit rating) the issue after six months," he explained.

The AA+ (sri) rated bank's previous subordinated debentures carried an AA (sri) rating from Fitch Ratings Lanka.

For the six months ended June 30, 2005, group net profits rose 21 percent to Rs. 873 million, while income was up 24 percent to Rs. 1.4 billion.

(US$ 1 = Rs. 101)

-LBO Newsdesk: LBOEmail@vanguardlk.com