Fitch rates Nations Trust Bank debt A-(lka)

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

The debentures, totaling LKR 3.5 billion, will have maturities of five years and carry fixed coupons. The debentures qualify as regulatory Tier 2 capital for the bank and include a non-viability clause.

The bank plans to use the proceeds to support its loan book expansion and to strengthen its Tier 2 capital base. The debentures are to be listed on the Colombo Stock Exchange.

Fitch rates the proposed Basel III Tier 2 notes one notch below the bank's national long-term rating of A(lka). This reflects the notes' higher loss-severity risks compared with senior unsecured instruments due to the notes' subordinated status, Fitch explained.

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