Sri Lanka Commercial Bank debt gets final ‘AA-(lka)’ Fitch rating

ECONOMYNEXT – Fitch Ratings Lanka has assigned Commercial Bank of Ceylon’s proposed Basel II-compliant subordinated debentures of up to 7 billion rupees a final National Long-Term Rating of ‘AA-(lka)’.

The final rating is the same as the expected rating assigned on 22 December 2015, and follows the receipt of documents conforming to information already received, a statement said.

The debentures, which will have tenors of five and 10 years and carry fixed coupons, will be listed on the Colombo Stock Exchange.

Commercial Bank expects to use the proceeds to strengthen its Tier 2 capital base and reduce asset-and-liability maturity mismatches.

The issue is rated one notch below Commercial Bank’s National Long-Term Rating, to reflect the subordination to senior unsecured creditors, Fitch said.

“CB’s rating is driven by its measured risk appetite, solid franchise, sound track record, and strong funding profile,” the statement said.

“The rating on the proposed debentures will move in tandem with CB’s National Long-Term Rating.”

Fitch said the bank’s rating is primarily sensitive to its ability to withstand cyclical asset quality deterioration.  (Colombo/January 13, 2016)

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