Fitch rates HNB’s debentures, ‘AA-(lka)’
Fitch Ratings has assigned Sri Lanka-based Hatton National Bank PLC’s
(HNB; AA-(lka)/Stable) proposed issue of unsecured, redeemable
debentures of up to LKR3bn an expected National Long-Term rating of
‘AA-(lka)(EXP)’.
HNB expects to list the debentures subject to regulatory approvals.
The final rating is contingent upon the receipt of final documentation
conforming to information already received.
The proposed debentures are rated at the same level as HNB’s National
Long Term Rating as they will constitute direct, unconditional,
unsecured and unsubordinated obligations of the bank. The debentures are
expected to have a tenor of 10 years with a bullet principal payment at
maturity and will be issued at Rs.67.715 per Rs.100 face value.
HNB expects to use the proceeds to fund its lending activities. HNB’s
ratings reflect its strong domestic franchise in lending and deposit
mobilisation as the fourth-largest bank in Sri Lanka, as well as its
satisfactory capitalisation and operating performance. However, HNB
exhibits weaker asset quality than higher-rated peers, as reflected in
higher and more volatile non-performing loan (NPL) ratios and lower
provisions coverage, which constrain its ratings. |