Fitch rates National Development debt A+(lka)

Fitch Ratings Lanka said it assigned National Development Bank plc's (AA-(lka)/stable) proposed subordinated debentures of up to LKR 10 billion an expected national long-term rating of A+(lka)(EXP).

The debentures are to be listed on the Colombo Stock Exchange. They will be issued in three tranches with maturity of five, 10 and 12 years while coupon payments will be at fixed rates.

The bank expects to use the proceeds to strengthen the bank's regulatory Tier 2 capital base.

The proposed debentures are rated one notch below National Development's national long-term rating to reflect their gone-concern loss-absorption quality in the event of liquidation, in line with Fitch's criteria for rating such securities. The proposed debentures' expected rating is the same as the rating on the bank's outstanding subordinated debentures.

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