COLOMBO, Nov 04, 2014 (EcononyNext) – Sri Lanka’s Seylan Bank Plc plans to sell 6.0 billion rupees in bonds which have been given an expected rating of ‘A-(lka)’, Fitch Ratings said.
The bonds will have tenors of 4, 5 and 6 years and will pay fixed rates of interest.
"Seylan expects to use the proceeds to strengthen its funding mix and to reduce asset and liability maturity mismatches," the rating agency said.
The full statement is given below:
Fitch Rates Sri Lanka’s Seylan Bank’s Debentures ‘A-lka)(EXP)’
Fitch Ratings-Colombo/Taipei-04 November 2014: Fitch Ratings Lanka has assigned Seylan Bank PLC’s (Seylan; A-(lka)/Stable) proposed senior debentures of up to LKR6bn 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.
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)’