Friday, 1 November 2013 03:30
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Fitch Ratings has assigned Sri Lanka-based DFCC Bank’s (DFCC) $ 100 million senior unsecured notes due October 2018 a final rating of ‘B+’ and a Recovery Rating of ‘RR4’. The rating follows the receipt of documents conforming to the information previously received by Fitch. A full list of DFCC’s ratings is provided at the end of this commentary. The final rating is in line with the ‘B+(EXP)’ expected rating Fitch assigned to the notes on 24 September 2013. The notes have a maturity of five years and coupon payments will be at a fixed rate of 9.625% on a semi-annual basis. Key rating drivers The notes are rated at the same level as DFCC’s Long-Term Foreign Currency Issuer Default Rating (IDR) as they constitute direct, unsecured and unsubordinated obligations of the issuer. In line with Fitch’s criteria, Recovery Ratings are assigned to entities with an IDR of ‘B+’ or below. Fitch has assigned a Recovery Rating of ‘RR4’ to the notes to reflect average recovery prospects of 31% -50% for holders of this debt, in case of default under both a standalone and consolidated basis. Rating sensitivities As the rating of the notes is linked to DFCC’s IDR, any changes to that rating would impact the issue’s rating. A full list of DFCC’s ratings follows: Long-Term Foreign- and Local-Currency IDRs: ‘B+’; Stable Outlook USD senior, unsecured notes: ‘B+’; Recovery Rating: ‘RR4’ Short-Term Foreign Currency IDR: ‘B’ Viability Rating: ‘b+’ Support Rating: ‘4’ Support Rating Floor: ‘B’ National Long-Term Rating: ‘AA-(lka)’; Outlook Stable Senior unsecured debentures: ‘AA-(lka)’ Subordinated debentures: ‘A+(lka)’
