Fitch rates Hatton National Bank's subordinated debt final 'A+'

Wednesday, 17 February 2016 00:00 - - {{hitsCtrl.values.hits}}

Fitch Ratings has assigned Hatton National Bank PLC’s (HNB, AA-(lka)/Stable) proposed subordinated debentures of up to Rs. 7 b a final National Long-Term Rating of ‘A+(lka)’.

The assignment of the final rating follows the receipt of documents conforming to information already received, and the final rating is the same as the expected rating assigned for the subordinated debt on 4 September 2015.

The issue will have a tenor of five years with fixed coupon payments. HNB expects to use the proceeds to reduce asset and liability maturity mismatches while improving its Tier 2 capital base.

Key rating drivers

The proposed subordinated debentures are rated one notch below HNB’s National Long-Term Rating, to reflect the subordination to senior unsecured creditors.

HNB’s rating reflects its strong franchise, satisfactory capitalisation, established track record and higher risk appetite than its better-rated peers.

Rating sensitivities

The ratings on the proposed debentures will move in tandem with HNB’s National Long-Term Rating.]

A full list of HNB’s ratings follows:

nNational Long-Term Rating: ‘AA-(lka)’; Outlook Stable

nSri Lanka rupee-denominated senior unsecured debentures: ‘AA-(lka)’

nBasel II-compliant outstanding subordinated debentures: ‘A+(lka)’

nProposed Basel II-compliant subordinated debentures: ‘A+(lka)’