Fitch rates MCSL notes BBB-(lka)

Fitch Ratings said it placed MCSL Financial Services Ltd.'s BBB(lka) national long-term rating on Rating Watch positive following news of a proposed merger with other subsidiaries of Bank of Ceylon.

The proposed subordinated redeemable debentures of up to 500 million in Sri Lankan rupee also were assigned a final national long-term rating of BBB-(lka).

The issue is expected to have a tenor of five years with fixed-rate coupon payments, Fitch said. The debentures are to be included as regulatory tier 2 capital. As the debentures do not contain any deferral clauses, Fitch said it has not assigned any equity credit to this issue.

The positive watch reflects an expectation of greater importance of the merged entity to the group, the likelihood of Bank of Ceylon being the dominant shareholder and the expectation of continued support to the merged entity by Bank of Ceylon, the agency said.

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