ComBank sub debt rated 'AA-(lka)'

Fitch Ratings Lanka has assigned Commercial Bank of Ceylon PLC's (CB) proposed subordinated debentures of upto Rs 1 billion a National Long-Term rating of 'AA-(lka)'. A full rating breakdown is provided at the end of this commentary.

The proposed debentures are rated one notch below CB's National Long-Term rating to reflect their debt-like features.

The debentures will have a maturity of five years with principal repayment as a bullet payment on maturity. Coupon payments will be annual at fixed rates, and do not contain any deferral clauses.

The debentures are to be listed on the Colombo Stock Exchange alongside CB's other listed and rated debentures. The issuance is aimed at strengthening CB's Tier 2 capital base.

CB's ratings reflect its solid domestic franchise, sound profitability and its strong capital position.