Fitch: Pan Asia notes BBB(lka)

Fitch Ratings said it assigned a final national long-term rating of BBB(lka) to Pan Asia Banking Corp. plc’s issue of senior unsecured debentures of up to 4 billion in Sri Lanka rupee.

The final rating is the same as the expected rating assigned in June and follows the receipt of documents conforming to information already received, Fitch said.

The debentures will have maturities of three- and four-years with a combination of fixed-rate and floating-rate coupons, the agency said.

The proceeds will be used to reduce structural maturity mismatches, diversify the funding mix and secure medium-term funding, Fitch said.

The issue was rated in line with the bank’s national long-term rating of BBB(lka) as it will rank equally with the claims of the bank’s other senior unsecured creditors, the agency said.

The ratings reflect the company’s weak capitalization amid rapid growth in its loan book, Fitch said.

The ratings also consider the bank’s weak asset quality relative to higher-rated peers, moderate franchise and improving profitability due to an expanding savings account base that helped to drive higher net-interest margins, the agency said.

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