Fitch: National Development Bank notes A+(lka)

Fitch Ratings said it assigned a final national long-term rating of A+(lka) to National Development Bank plc's proposed subordinated debentures of up to 10 billion in Sri Lankan rupee.

The debentures will be issued in three tranches with maturity of five-, 10- and 12 years while coupon payments will be at fixed rates, Fitch said.

The proposed debentures are rated one notch below the bank's national long-term rating to reflect their below-average recovery prospect relative to senior unsecured debt in the event of liquidation, the agency said.

The subordinated debt rating will move in tandem with the bank's national long-term rating, Fitch said.

A solid track record in developing and maintaining a commercial banking franchise with commensurate credit metrics could result in an upgrade of the bank's ratings while a sustained and substantial weakening in asset quality, capitalization and in provision coverage could result in a downgrade, the agency said.

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