Fitch rates Sampath Bank notes A(lka)

Fitch Ratings said it assigned an expected national long-term rating of A(lka) to Sampath Bank plc’s proposed Basel II-compliant subordinated debentures.

The issuance is for 7 billion in Sri Lanka rupees maturing in five years with fixed- and floating-coupons, the agency said.

The outlook is stable.

The proceeds will be used to strengthen the bank’s tier 2 capital base, Fitch said, and match the duration of the assets and liabilities in its long-term lending portfolio.

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

The ratings reflect the bank’s lower capitalization relative to that of its peers and relatively higher risk appetite, which offset benefits from the growth of its franchise, Fitch said.

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