Fitch rates Seylan Bank’s debentures ‘A-lka)(EXP)’

Wednesday, 5 November 2014 01:08 -     - {{hitsCtrl.values.hits}}

Fitch Ratings Lanka has assigned Seylan Bank PLC’s (Seylan; A-(lka)/Stable) proposed senior debentures of up to Rs. 6 b an expected National Long-Term Rating of ‘A-(lka)(EXP)’. The debentures, which are to have tenors of four, five and six years and carry fixed coupons, are to be listed on the Colombo Stock Exchange. Seylan expects to use the proceeds to strengthen its funding mix and to reduce asset and liability maturity mismatches. The final rating is subject to the receipt of final documentation conforming to information already received.   Key rating drivers The proposed debentures are rated at the same level as Seylan’s National Long-Term Rating in accordance with Fitch’s criteria as they constitute unsecured senior obligations of the bank. Seylan’s rating reflects Fitch’s view that the Sri Lankan state (BB-/Stable) would provide extraordinary support to the bank, in case of need, because the regulator has identified Seylan as a one of six systemically important domestic banks.   Rating sensitivities Fitch does not expect Seylan’s National Ratings to be downgraded as support to Seylan is likely to continue given the bank’s systemic importance. The ratings on the proposed debentures will move in tandem with Seylan’s National Long-Term Rating. A full list of Seylan’s ratings follows: National Long-Term Rating: ‘A-(lka)’; Stable Outlook Outstanding Sri Lanka rupee-denominated senior unsecured debentures: ‘A-(lka)’ Outstanding Sri Lanka rupee-denominated subordinated debentures: ‘BBB+(lka)’ Proposed Sri Lanka rupee-denominated senior unsecured debentures: ‘A-(lka)(EXP)’