Fitch rates Seylan Bank’s Basel III subordinated debt ‘BBB(EXP)(lka)’; on RWN

Fitch Ratings has assigned Seylan Bank PLC’s (A-(lka)/Rating Watch Negative (RWN)) proposed Sri Lankan rupee-denominated Basel III-compliant subordinated debentures of up to Rs.7 billion an expected National Long-Term Rating of ‘BBB(EXP)(lka)’ and placed it on RWN. 

The proposed debentures will mature in five years and will be listed on the Colombo Stock Exchange. The bank plans to use the proceeds to strengthen its Tier 2 capital base as well as to meet demand for credit.

The bank expects the proposed debentures to qualify as Basel III-compliant regulatory Tier 2 capital.

 The debentures include a non-viability clause whereby they will convert to ordinary voting shares subject to the occurrence of a trigger event, as determined by the Monetary Board of 
Sri Lanka. 

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