Fitch Rates Commercial Bank of Ceylon’s Subordinated Debt ‘AA- ( lka)(EXP)

Fitch Ratings has assigned Commercial Bank of Ceylon PLC's (CB; AA(lka)/Stable) proposed subordinated debentures of up to LKR7bn an expected National LongTerm Rating of 'AA-(lka)(EXP)'. The debentures, which are to have tenors of five and 10 years and carry fixed and floating coupons, are to be listed on the Colombo Stock Exchange. CB expects to use the proceeds to reduce asset and liability maturity mismatches, and improving its Tier II capital base. The final rating is subject to the receipt of final documentation conforming to information already received. KEY RATING DRIVERS The proposed subordinated debentures are rated one notch below CB's National LongTerm Rating to reflect the subordination to senior unsecured creditors. The National Long Term Rating of CB reflects its measured risk appetite relative to peers', strong funding profile, solid domestic franchise and sound performance. The ratings reflect Fitch's expectation that its nondomestic operations will remain small. RATING SENSITIVITIES The ratings on the proposed debentures will move in tandem with CB's National LongTerm Rating. CB's ratings are follows: National LongTerm Rating: 'AA(lka)'; Outlook Stable Basel II compliant outstanding subordinated debentures: 'AA( lka)' Proposed Basel II compliant subordinated debentures: 'AA (lka)(EXP)'