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| Sunday, 4 May 2003 |
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| News Business Features Editorial
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Commercial Bank debenture, preference share issues open tomorrow Commercial Bank of Ceylon Limited announced last week that it will issue three billion rupees worth of unsecured, subordinated, redeemable debentures and one billion rupees worth of cumulative redeemable preference shares. Both issues will officially open tomorrow. Five-year unsecured subordinated redeemable debentures worth two billion rupees, each priced at Rs 1,000, will initially be issued. Two options are available; Type A with a fixed interest rate of 10 per cent per annum; and Type B with a floating interest rate equivalent to the three-month Treasury Bill after 10 per cent Withholding Tax rate plus two per cent per annum. Interest on both will be paid quarterly. The bank has the option of going for a further one billion rupees worth of debentures in the event of an oversubscription. Deutsche Bank will be the trustee to the issue for which an SL AA rating has been assigned by Fitch Ratings Lanka Ltd, denoting a strong capacity for timely settlement of financial commitments. Commercial Bank also announced a simultaneous issue of five-year Rs 500 million worth of cumulative redeemable preference shares each priced at Rs 10. It has the option of issuing an additional Rs 500 million worth of shares if the issue is oversubscribed. A fixed dividend of 11.25 per cent will be paid as at December 31 each year on these preference shares. The SL AA rating has been awarded to this issue as well, denoting a very low expectation of credit risk. This capacity is not significantly vulnerable to foreseeable events. Ranjith Samaranayake, Deputy General Manager (Finance and Planning), explaining the liquidity of the issues, said: "Both debentures and preference shares will be quoted on the Colombo Stock Exchange". |
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