Sri Lanka Fitch gives HNB’s debt Final ‘A+(lka)’ rating

ECONOMYNEXT – Fitch Ratings Lanka said it has given Hatton National Bank’s (HNB) proposed Basel II-compliant subordinated debentures of up to Rs6 billion a final National Long-Term Rating of ‘A+(lka)’.

The debentures, which will have tenors of five and seven years, and carry fixed coupons, will be listed on the Colombo Stock Exchange. HNB expects to use the proceeds to strengthen its Tier II capital base, a statement said.

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

“HNB’s National Long-Term Rating reflects its strong domestic franchise, satisfactory capitalisation and strong performance, which are counterbalanced by a higher risk appetite as seen in the sustained high loan growth that has put pressure on its funding and liquidity profile,” Fitch said.

The ratings on the debentures will move in tandem with HNB’s National Long-Term Rating.
(COLOMBO, Oct 13, 2016)

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