Hunt For Rupees

Commercial Bank said Thursday it was raising a billion rupees through a five-year preference share issue to strengthen its shareholder funds.
The bank said 50 mn cumulative, redeemable, preference share will be issued at Rs. 10 with the option of raising a further 50 mn on the same terms, in the event of an over subscription.rn

rnThe new preference shares joins the earlier 90.655 mn cumulative preference share issue, which is redeemable in Sept. 2006.rn

rnThe existing preference share issue carries a 13 percent fixed dividend, but the new issue would cost the bank only 11 percentrn

rnThe bank also plans to tap the market for Rs. 3 bn with the backing of an issue rating from Fitch Ratings Lanka.rn

rnThe funds will be largely used to expand the banks leasing portfolio and help expand operations to the North and Eastrn

rnThe five-year subordinated, unsecured, redeemable debentures, carries an option of a fixed or floating interest rate.rn

rnThe floating rate issue is priced at 2 percent above