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Fitch gives Seylan Bank debt BBB+(lka)
Fitch Ratings said it assigned Seylan Bank plc's (A-(lka)/stable) proposed Basel III-compliant subordinated debentures an expected national long-term rating of BBB+(lka)(EXP).
The debentures will have tenors of five, seven and 10 years and carry fixed coupons. The debentures are to be listed on the Colombo Stock Exchange and the bank plans to use the proceeds to fund loan growth, strengthen its funding mix, reduce structural maturity mismatches and reduce its short-term borrowings.
Fitch said it rates the proposed Tier 2 instrument one notch below Seylan's standalone rating to reflect the debentures' subordinated status and higher loss-severity risks relative to senior unsecured instruments. The debentures would convert to equity upon the occurrence of a trigger event, as determined by the Monetary Board of Sri Lanka.
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