The five-year debt paper is expected to be listed on the Colombo Stock Exchange, and will be used to beef up Sampath’s Tier II capital, Fitch said on Tuesday.
Fitch Rates Sampath Bank's Subordinated Debt 'A+(lka)'
Fitch Ratings-Colombo/Mumbai/Singapore-26 June 2012: Fitch Ratings Lanka has assigned Sampath Bank PLC's (SB) proposed subordinated debentures of up to LKR2.5bn (around USD19m) a National Long-Term rating of 'A+(lka)'. A full rating breakdown is provided at the end of this commentary.
The proposed debentures are rated one notch below SB's National Long-Term rating to reflect their debt-like features.
The debentures will have a maturity of five years, with principal repayment as a bullet payment on maturity.
Coupon payments will be at fixed or floating rates, and do not contain any deferral clauses. The debentures are to be listed on the Colombo Stock Exchange. The issuance is aimed at strengthening SB's Tier 2 capital base and improving maturity mismatches.
SB's ratings reflect its strong asset quality and profitability in a local context, its comfortable equity buffer maintained against future loan losses, as well as its rapid growth from 2010.
Established in 1986, SB is Sri Lanka's fifth-largest licensed commercial bank, accounting for 6 percent of sector assets as at end-2011.