Fitch Ratings has assigned Siyapatha Finance PLC’s (A(lka)/Stable) proposed Sri Lankan rupee subordinated listed debentures a final National Long-Term Rating of ‘BBB+(lka)’.
The notes, which will total up to LKR1.5 billion, will mature in five years and carry fixed coupons. The debentures will be listed on the Colombo Stock Exchange. The proposed issue will improve Siyapatha’s Tier 2 capital base, with the proceeds used to fund loan-book growth.
The final rating is the same as the expected rating assigned on 13 July 2021, and follows the receipt of documents conforming to information already received.
KEY RATING DRIVERS
Siyapatha’s Sri Lankan rupee subordinated debentures are rated two notches below its National Long-Term Rating anchor. This reflects Fitch’s baseline notching for loss severity for this type of debt and our expectations of poor recoveries. There is no additional notching for non-performance risk.
Siyapatha’s National Long-Term Rating was affirmed on 5 February 2021. The rating reflects Fitch’s expectation that the parent, Sampath Bank PLC (AA-(lka)/Stable), would provide extraordinary support to its subsidiary, if needed. This view is based on Sampath’s 100% shareholding, a record of ordinary support and Siyapatha’s brand, which reflects that of Sampath. Siyapatha is rated two notches below its parent because of its limited role in the group’s core business. The rating also captures Siyapatha’s limited operational and management integration with its parent.
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