The Rs 5 billion debenture issue of Commercial Bank of Ceylon PLC closed within minutes of opening on Monday, 24th October after it was oversubscribed twice over, the Bank has announced.

The Bank received a substantial amount of applications and has decided to exercise its option of enlarging the issue to Rs 7 billion, the Bank notified the Colombo Stock Exchange (CSE).

The basis of allotment of the debentures will be decided by the Board of Directors of the Bank and will be notified to the CSE in the near future, the Bank said.

“We thank our customers and investors for this emphatic vote of confidence in the strength, stability and growth prospects of the Bank,” Commercial Bank’s Managing Director/CEO Mr Jegan Durairatnam said, commenting on the issue’s oversubscription.

This was Commercial Bank’s second issue of debentures for 2016. It was intended to strengthen the Bank’s Tier II capital and to raise long term funds for expansion.

The Listed, Rated, Unsecured, Subordinated, Redeemable Debentures in the denomination of Rs 100 were offered in two tenures – Type A with a five year tenure and Type B with a 10 year tenure. The five-year debentures carry a fixed interest rate of 12.00% p.a. (AER 12.36%) payable semi-annually, while the ten-year debenture offer a fixed interest rate of 12.25% p.a. (AER 12.63%), also payable semi-annually.

These debentures were rated AA- (lka) by Fitch Ratings Lanka Limited. Commercial Bank’s National Long-Term Rating has been affirmed at AA (lka)/Stable by Fitch Ratings Lanka Limited. The Investment Banking Division of Commercial Bank of Ceylon PLC was the Manager to the Issue.