Sri Lanka’s Commercial Bank of Ceylon has received an anticipated National Long-Term Rating of ‘A(EXP)(lka)’ for its proposed subordinated debentures, which are compliant with Basel III regulations, amounting to a total of up to 20 billion rupees, according to Fitch Ratings.<\/p>\n
The ratings agency highlighted that the National Long-Term Rating of Commercial Bank serves as the foundational rating for these debentures, as it reflects the bank’s independent financial robustness and effectively indicates the likelihood of the bank’s non-viability.<\/p>\n
The subordinated debentures will feature a non-viability clause allowing for conversion into ordinary voting shares upon the occurrence of a specific trigger event and will be made available on the Colombo Stock Exchange.<\/p>\n
The following statement details the rating assignment:<\/p>\n
Fitch Ratings – Colombo – 16 April 2026: Fitch Ratings has assigned an anticipated National Long-Term Rating of ‘A(EXP)(lka)’ to the proposed subordinated debentures, denominated in Sri Lankan rupees, of Commercial Bank of Ceylon PLC (COMB, AA-(lka)\/Stable). The debentures are set to be issued for a total of up to LKR20 billion.<\/p>\n
These debentures will have maturities of five, seven, and ten years and are intended to be listed on the Colombo Stock Exchange. The bank aims to utilize the funds raised to bolster its Tier 2 capital, mitigate maturity mismatches in its balance sheet, and facilitate loan expansion.<\/p>\n
The bank anticipates that the proposed debentures will qualify as regulatory Tier 2 capital under Basel III guidelines. The conversion clause will activate in response to a trigger event, as defined by the Central Bank of Sri Lanka’s Governing Board.<\/p>\n
Final ratings will be confirmed upon the receipt of documentation that aligns with the previously provided information.<\/p>\n
Key Elements Influencing the Rating:<\/p>\n
Fitch has rated the proposed Basel III Tier 2 notes two notches lower than the bank’s National Long-Term Rating anchor. This rating decision reflects Fitch’s standard assessment regarding potential loss severity associated with this type of debt and the expectation of limited recovery options. There are no additional adjustments made for non-performance risks since the proposed notes lack features that absorb losses while the bank remains a going concern.<\/p>\n
The National Long-Term Rating of COMB serves as the standard for this instrument’s rating, as it encapsulates the bank’s independent financial strength and indicates the risk of becoming non-viable.<\/p>\n
Fitch last reviewed the ratings for COMB without any changes on 8 September 2025. For insights into recent rating actions, refer to the commentary titled “Fitch Upgrades 10 Sri Lankan Banks\u2019 National Ratings and Affirms Five after Scale Recalibration,” published on 21 January 2025, which outlines the primary rating drivers and sensitivities.<\/p>\n
Potential Rating Sensitivities:<\/p>\n
Factors that could lead to a downgrade include a decrease in the bank’s National Long-Term Rating, which would subsequently affect the anticipated rating.<\/p>\n
Conversely, any improvement in the bank’s National Long-Term Rating could result in an upgrade of the expected rating.<\/p>\n","protected":false},"excerpt":{"rendered":"
Sri Lanka’s Commercial Bank of Ceylon has received an anticipated National Long-Term Rating of ‘A(EXP)(lka)’ for its proposed subordinated debentures, which are compliant with Basel III regulations, amounting to a total of up to 20 billion rupees, according to Fitch Ratings. The ratings agency highlighted that the National Long-Term Rating of Commercial Bank serves as […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2}},"categories":[240,14],"tags":[],"class_list":["post-10197","post","type-post","status-publish","format-standard","hentry","category-sri-lanka","category-sl-stock-market"],"yoast_head":"\n