Debt Rating

Oct 07, 2011 (LBO) – Fitch Ratings Lanka has assigned Hatton National Bank’s (HNB) proposed subordinated debentures of up to two billion rupees a National Long-Term rating of ‘A+(lka)’. “The issue is rated one notch below HNB’s National Long-Term rating reflecting its debt-like features,” a statement said.

The full Fitch rating report follows:

Fitch Ratings Lanka has assigned Hatton National Bank PLC’s (HNB) proposed subordinated debentures of up to LKR2.0bn a National Long-Term rating of ‘A+(lka)’. A full list of HNB’s ratings is provided at the end of this commentary.

The issue is rated one notch below HNB’s National Long-Term rating reflecting its debt-like features. The proposed debentures will have a maturity of 10 years with principal repayment as a bullet payment on maturity. Coupon payments will be semi-annual at a fixed rate and do not contain any deferral clauses. The debentures are to be listed on the Colombo Stock Exchange alongside HNB’s other listed and rated debentures.

As at June 2011, HNB’s tier I and total capital adequacy ratio (CAR) was 9.13% and 10.3%, respectively, at the bank level. The subordinated debenture issue will increase HNB’s regul