HNB to sell Rs.6bn debt to support Tier II capital

Fitch Ratings has assigned Hatton National Bank PLC’s (HNB; AA-(lka)/Stable) proposed subordinated debenture issue of up to Rs.6bn 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 bank’s Tier II capital adequacy was at 12.97 percent as at June 30, 2016. 
HNB also raised Rs.7 billion this March through a subordinated debenture issue.

The final rating of the proposed debenture issue is subject to the receipt of final documentation conforming to information already received Fitch said.  The rating agency also said the proposed subordinated debentures are rated one notch below HNB’s national long-term rating to reflect the subordination to senior unsecured debt.