|Thursday, 8 May 2003|
Commercial Bank's debenture and Preference Share issues oversubscribed on opening day
Commercial Bank said yesterday that the initial issue of both Rs. 2 billion worth of unsecured, subordinated redeemable debentures and Rs. 500 million worth of cumulative redeemable preference shares were oversubscribed on the opening day itself.
The initial issue of Rs. 2 billion worth of debentures were oversubscribed on the very first day of the official opening and at the time of closure on May 6 had been oversubscribed by Rs. 220 million. The initial issue of Rs. 500 million worth of preference shares too were oversubscribed by more than a further Rs. 530 million.
This is easily the highest subscription that a debenture and or preference share isue in Sri Lanka has hitherto received on the opening day.
The bank said that this is a clear expression of the high degree of confidence the investing public has placed in the strength and stability of the bank. In appreciation of this, the bank would reciprocate by accommodating the excess subscriptions for the debentures under the option available as per the prospectus instead of pro-rating the allotments. However, in the case of preference shares, the similar option available too is insufficient to accommodate the total subscriptions. Therefore the bank is compelled to work out a basis of allotment of shares.
According to financial analysts both issues were oversubscribed on the opening day mainly due to the fact that the Commercial Bank is the strongest among all the listed banks in Sri Lanka.
Ranjith Samaranayake, Deputy General Manager Finance and Planning, explaining the success of both these issues said, "The real reason behind Commercial Bank's success is its high capital strengths and the strong profitability.
This has enabled us to earn SLAA+ for our senior debt which is the best credit rating given by Fitch Ratings to a local commercial bank."
SL AA+ denotes a very low expectation of credit risk and thecapacity for timely settlement of financial commitments. "Furthermore Commercial Bank has the highest capital adequacy ratio among peer banks, which is the internationally accepted yardstick for measuring the stability of a bank", he said.
In 2003, Commercial Bank was voted the "Best Bank in Sri Lanka" for the fifth consecutive year by the prestigious, New York based 'Global Finance' magazine. Last year, it was also nominated as the "Bank of the Year - Sri Lanka' for the second consecutive year by 'The Banker' magazine published by the London based Financial Times group. Last year Sri Lanka's leading corporate magazine ' Business Today' ranked Commercial Bank as the No. 1 Company in the country and Fitch Ratings re-confirmed SL AA+ rating for the long term unsecured senior debt of the bank.
Commercial Bank once again came on top winning three main awards at the recently concluded Institute of Chartered Accountants of Sri Lanka Annual Report, Awards Ceremony including the overall winner's award for the Best Annual Report, the Best in the Banking sector and first ever Good Corporate Governance Disclosures Award Commercial Bank has the largest computer linked network of 109 branches and 149 automated teller machines (ATMs) spread throughout the country.
Produced by Lake House