Fitch: National Development Bank notes A+(lka)

Fitch Ratings said it assigned an expected national long-term rating of A+(lka) to National Development Bank plc’s proposed subordinated debentures of up to 10 billion.

The bank has a long-term foreign-currency issuer default rating of B+, short-term foreign-currency issuer default rating of B, long-term local-currency issuer default rating of B+, viability rating of B+, national long-term rating of AA-(lka) and outstanding subordinated debentures rating of A+(lka).

The proposed subordinated debentures will have a tenor of five years and carry fixed- and zero-coupons, the agency said.

The proceeds will be used to strengthen the company’s tier 2 capital base and reduce asset- and liability-maturity mismatches, Fitch said.

The proposed subordinated debentures are rated one notch below the bank’s national long-term rating to reflect the subordination to senior unsecured creditors, the agency said.

The issuer rating is driven by the bank’s intrinsic financial strength and captures its long and stable operating history and its developing franchise as a commercial bank, Fitch said.

The rating on the proposed debentures will move in tandem with the bank’s national long-term ratings, Fitch added.

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