The debentures have a tenor of five years and the semi-annual coupon payments will be fixed at 13% a year. NTB expects to use the proceeds to refinance maturing debt, fund its projected growth and strengthen the bank's regulatory Tier 2 capital base.
The assignment of the final rating follows the receipt of final documents, which conform to information previously received. The final rating is the same as the expected rating assigned on 31 October 2013.
KEY RATING DRIVERS
The proposed debentures are rated one notch below NTB's National Long-Term Rating to reflect their below-average recovery prospect relative to senior unsecured creditors in the event of liquidation, in line with Fitch's criteria for rating such securities.
The subordinated debt rating will move in tandem with NTB's National Long-Term Rating.
An upgrade is contingent upon NTB demonstrating progress in building a strong commercial banking franchise, while an increase in risk appetite in conjunction with its efforts to speedily implement its strategic plan by expanding in segments that are susceptible to economic cycles, could result in a rating downgrade.