Commercial Bank of Ceylon : Prospectus - Basel III Debenture Issue 2022



COMMERCIAL BANK OF CEYLON PLC

PROSPECTUS

AN INITIAL ISSUE OF FIFTY MILLION (50,000,000) BASEL III COMPLIANT - TIER 2 LISTED RATED UNSECURED SUBORDINATED REDEEMABLE DEBENTURES WITH A NON-VIABILITY CONVERSION FEATURE ("DEBENTURES"), AT THE PAR VALUE OF LKR100/- EACH TO RAISE SRI LANKAN RUPEES FIVE BILLION (LKR5,000,000,000/-) WITH AN OPTION TO ISSUE UPTO A FURTHER FIFTY MILLION (50,000,000) OF SAID DEBENTURES TO RAISE UP TO SRI LANKAN RUPEES FIVE BILLION (LKR5,000,000,000/-), AT THE DISCRETION OF THE BANK IN THE EVENT OF AN OVERSUBSCRIPTION OF THE INITIAL ISSUE.

MAXIMUM ISSUE OF DEBENTURES WILL NOT EXCEED ONE HUNDRED MILLION (100,000,000) OF THE SAID DEBENTURES, AT A VALUE NOT EXCEEDING SRI LANKAN RUPEES TEN BILLION (LKR10,000,000,000/-).

TO BE LISTED ON THE COLOMBO STOCK EXCHANGE.

Rated A (lka) on Rating Watch Negative by Fitch Ratings Lanka Limited

Issue opens on

December 01, 2022

ISSUE IS LIMITED TO 'QUALIFIED INVESTORS' AS DEFINED HEREIN.

Managers to the Issue: Commercial Bank of Ceylon PLC Investment Banking Unit "Commercial House"

No. 21, Sir Razik Fareed Mawatha, P. O. Box 856,

Colombo 01, Sri Lanka.

Tel:	[phone]	491/2
	[phone]	489/99
Fax:	[phone]	385

E-mail: [e-mail]

RESPONSIBILITY FOR THE CONTENT OF THE PROSPECTUS

The Directors of Commercial Bank of Ceylon PLC (the Bank), collectively and individually, having made all reasonable enquiries confirm that to the best of their knowledge and belief, that this Prospectus contains all information with respect to the Bank, which is material in the context of the Issue; that the information contained herein is true and correct in all material respects and is not misleading; that there are no other material facts, the omission of which would, make any statement contained herein misleading; that the opinions and intentions expressed herein are honestly held and have been reached after considering all relevant circumstances and are based on reasonable assumptions.

Where representations regarding the future performance of the Bank have been given in this Prospectus, such representations have been made after due and careful enquiry of the information available to the Bank and making assumptions that are considered to be reasonable at the present point in time in their best judgment.

The Bank accepts responsibility for the information contained in this Prospectus. While the Bank has taken reasonable care to ensure full and fair disclosure of pertinent information, it does not assume any responsibility for any investment decisions made by Qualified Investors based on information contained herein. In making an investment decision, prospective Qualified Investors are advised to read the Prospectus and rely on their own examination and assessments of the Bank and the terms of the Debentures issued including the risks involved.

IF YOU ARE IN ANY DOUBT REGARDING THE CONTENTS OF THIS DOCUMENT OR IF YOU REQUIRE ANY ADVICE IN THIS REGARD, YOU SHOULD CONSULT YOUR BANK MANAGER, STOCK BROKER, LAWYER OR ANY OTHER PROFESSIONAL ADVISOR.

THE DELIVERY OF THIS PROSPECTUS SHALL NOT UNDER ANY CIRCUMSTANCES CONSTITUTE A REPRESENTATION OR CREATE ANY IMPLICATION OR SUGGESTION THAT THERE HAS BEEN NO MATERIAL CHANGE IN THE AFFAIRS OF THE BANK SINCE THE DATE OF THIS PROSPECTUS. PLEASE REFER TO THE DISCLOSURES MADE BY THE BANK ON THE CSE WEBSITE IN RESPECT OF ANY MATERIAL CHANGE (IF ANY) IN THE AFFAIRS OF THE BANK SINCE THE DATE OF THIS PROSPECTUS.

THE COLOMBO STOCK EXCHANGE (THE 'CSE') HAS TAKEN REASONABLE CARE TO ENSURE FULL AND FAIR DISCLOSURE OF INFORMATION IN THIS PROSPECTUS. HOWEVER, THE CSE ASSUMES NO RESPONSIBILITY FOR ACCURACY OF THE STATEMENTS MADE, OPINIONS EXPRESSED OR REPORTS INCLUDED IN THIS PROSPECTUS. MOREOVER, THE CSE DOES NOT REGULATE THE PRICING OF THE DEBENTURES WHICH IS DECIDED SOLELY BY THE ISSUER.

The delivery of this Prospectus shall not under any circumstance constitute a representation or create any implication or suggestion that there has been no material change in the affairs of the Bank since the date of this Prospectus. If any material change in the affairs of the Bank occurs subsequent to the Prospectus date and before the Issue Opening, it will be disclosed by way of a market announcement.

The Bank is bound by the enforcement Rules set out in the CSE Listing Rules (inter-alia).

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Public

IMPORTANT NOTICE

By acquiring any Debenture, each Debentureholder irrevocably consents to the principal amount of the Debenture and any accrued and unpaid interest thereon being deemed to be paid in full by the issuance of ordinary voting shares upon occurrence of a Trigger Event and the resulting Non-Viability Conversion which is required to be effected by the Bank.

Upon a Non-Viability Conversion;

1. The Trustees shall not be required to take any further directions from holders/ beneficial owners of the Debentures under the Trust Deed
2. The Trust Deed shall impose no duties upon the Trustees whatsoever with respect to conversion of the Debentures into ordinary voting shares upon a Trigger Event
3. Upon the occurrence of a Trigger Event, each outstanding Debenture of this Issue will be converted as set out in this Prospectus, on a full and permanent basis

We advise you to read the content of the Prospectus carefully prior to investment.

This investment instrument is riskier than a bank deposit.

These Debentures are complex products and have provision for loss absorption in the form of a Non-Viability Conversion as set out in this Prospectus. This means that following the occurrence of a Trigger Event as may be determined by the Central Bank of Sri Lanka, the Bank will convert the Debentures into ordinary voting shares. An investor will be deemed paid in full the principal plus accrued and unpaid interest due on the Debentures, upon such a conversion. The number and value of ordinary voting shares to be received on a Non-Viability Conversion may be worth significantly less than the par value of the Debentures and can be variable.

Please refer to the Risk Factors section of the Prospectus for further details.

Each potential Qualified Investor in these Debentures must determine the suitability of an investment in these Debentures in light of the investors' circumstances. In particular, each potential Qualified Investor may wish to consider, either through an analysis conducted by the Qualified Investor or conducted with the assistance of any relevant financial and/or other professional advisors, whether the Qualified Investor:

1. Has sufficient knowledge and experience to make a meaningful evaluation of these Debentures, the merits and the risks of investing in these Debentures and the information contained or incorporated by reference in this Prospectus;
2. Has access to, and knowledge of, appropriate analytical tools to evaluate, in the context of the particular financial situation of the investor, an investment in these Debentures and the impact that these Debentures will have on the overall investment portfolio of the investor;
3. Has sufficient financial resources and liquidity to bear all risks of an investment in these Debentures;
4. Understands thoroughly the terms of these Debentures, including the provisions relating to the Non-Viability Conversion of these Debentures, and is familiar with the behaviour of financial markets; and
5. Is able to evaluate possible scenarios for economic, interest rate and other factors that may affect the investment and the investor's ability to bear the applicable risks.

A potential Qualified Investor should not invest in these Debentures unless the Qualified Investor has the expertise (either through an analysis conducted by the potential Qualified Investor or conducted with its financial and/or other professional advisors) to evaluate how these Debentures will perform under changing conditions, the resulting effects on the value of these Debentures and the impact this investment will have on the potential Qualified Investor's overall investment portfolio.

Commercial Bank of Ceylon PLC Debenture Prospectus

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