Fitch rates DFCC Bank notes AA-(lka)

Fitch Ratings said it assigned a final national long-term rating of AA-(lka) to DFCC Bank’s proposed senior debentures of up to 5 billion in Sri Lanka rupee.

The debentures have a tenor of three years with fixed coupons. The proceeds will be used for the bank’s lending activities, Fitch said.

The debentures are rated at the same level as DFCC’s national long-term rating as they constitute direct, unconditional, unsecured and unsubordinated obligations of the bank.

The bank also has a long-term foreign- and local-currency issuer default rating of B+, short-term foreign-currency issuer default rating of B, viability rating of B+, dollar-denominated senior unsecured notes rating of B+ with recovery rating of RR4, national long-term rating of AA-(lka), Sri Lanka rupee-denominated senior unsecured debentures rating of AA-(lka) and Sri Lanka rupee-denominated subordinated debentures rating of A+(lka).

The rating of the debentures will move in tandem with DFCC’s national long-term rating, the agency said.

DFCC is engaged in merger discussions with National Development Bank. Fitch said it believes that synergies from the possible merger could be beneficial to the credit profile of the merged entity in the long run, Fitch said.

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