Seylan Bank collects a BBB+ (sri) rating for its upcoming Rs. 1 bn debt issue

Seylan Bank collected a BBB+ (sri) rating from Fitch Ratings Lanka for its upcoming Rs. 1 bn debt issue. Seylan Bank collected a BBB+ (sri) rating from Fitch Ratings Lanka for its upcoming Rs. 1 bn debt issue. The issue helps roll over Rs. 470 mn of Seylan’s subordinated debentures maturing in November 2004.

Fitch says, the issue also qualifies as Tier II capital, and will help strengthen the bank’s regulatory capital position. Seylan’s CAR as at June 2004 was 13.68 percent (Tier I – 9.70 percent).

The Debentures in terms of priority, will be subordinate to deposits and all senior debt obligations, but will rank above the ordinary and preference shareholders.

Seylan’s senior debt carries a A- (sri) from Fitch. A BBB+ (sri) rating reflects adequate capacity to honour financial commitments, but may change subject to external conditions.

Seylan started off in 1987 and has risen up to be the third largest private bank in Sri Lanka, controlling eight percent of total assets in the banking system.

While Seylan provides a broad range of services, the bank’s key market segments are the mid- sized corporates and the SME segment which together accounts for an estimated 73 percent of loan book as at end 2003.

Fitch Ratings Lanka Ltd is a joint venture between Fitch Ratings, USA, International Finance Corporation Washington, Central Bank of Sri Lanka and several other leading local financial institutions.

Fitch Ratings, USA is one of the three global full service credit rating agencies and rates over 85 sovereign nations, 7,600 structured finance ratings, 2,900 international banks and financial institutions.

-LBO Newsdesk: LBOEmail@vanguardlanka.com