Sri Lanka Fitch rates Hatton National Bank’s debt ‘A+(lka)(EXP)’

ECONOMYNEXT – Fitch Ratings said it has assigned Hatton National Bank PLC’s proposed subordinated debenture issue of up to Rs6 billion an expected National Long-Term Rating of ‘A+(lka)(EXP)’.

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.

The final rating is subject to the receipt of final documentation conforming to information already received.

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

“The National Long-Term Rating of HNB 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,” a statement said.

The ratings on the proposed debentures will move in tandem with HNB’s National Long-Term Rating.
(COLOMBO, August 25, 2016)
 

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