Fitch gives DFCC Bank debt A+(lka)

Fitch Ratings said it assigned DFCC Bank plc's (B+/AA-(lka)/stable) proposed Sri Lanka rupee-denominated Basel III-compliant subordinated unsecured debentures an expected national long-term rating of A+(lka)(EXP).

The debentures, totaling LKR 7 billion, will have maturities of five and seven years and carry fixed coupons. The debentures qualify as regulatory Tier II capital for the bank and include a non-viability clause.

The bank plans to use the proceeds to support its loan-book expansion and strengthen its Tier II capital base.

Fitch said it rates the proposed notes one notch below the bank's national long-term rating of AA-(lka). This reflects the notes' higher loss-severity risks compared with senior unsecured instruments due to the notes' subordinated status, the agency explained.

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