(Repeat for additional subscribers)
July 23 (The following statement was released by the rating agency)
Fitch Ratings Lanka has assigned DFCC Bank's (DFCC; B+/Stable/AA-(lka)/Stable)
proposed senior debentures of up to LKR5bn a final National Long-Term Rating of 'AA-(lka)'.
The assignment of the final rating follows the receipt of final documents that
conform to information previously received. The final rating is at the same
level as the expected rating assigned on 23 June 2014.
The debentures have a tenor of three years with fixed coupons. The proceeds will
be used for the bank's lending activities.
KEY RATING DRIVERS - NATIONAL RATINGS AND DEBT RATINGS
The debentures are rated at the same level as DFCC's National Long-Term Rating
as they constitute direct, unconditional, unsecured and unsubordinated
obligations of the bank.
RATING SENSITIVITIES - NATIONAL RATINGS AND DEBT RATINGS
The rating of the debentures will move in tandem with DFCC's National Long- Term
An upgrade of DFCC's ratings would be contingent on the bank achieving a
materially stronger commercial banking franchise while maintaining strong credit
metrics. The ratings could be downgraded if there is a sustained and substantial
increase in the bank's risk appetite that could materially weaken its strong
DFCC is engaged in merger discussions with National Development Bank
(B+/Stable/AA-(lka)/Stable). Fitch is of the view that synergies from a possible
merger with National Development Bank could be beneficial to the credit profile
of the merged entity in the long run.
A full list of DFCC's ratings follows:
Long-Term Foreign- and Local-Currency IDRs: 'B+'; Stable Outlook
Short-Term Foreign-Currency IDR: 'B'
Viability Rating: 'b+'
Support Rating: '4'
Support Rating Floor: 'B'
US dollar senior unsecured notes: 'B+'; Recovery Rating: 'RR4'
National Long-Term Rating: 'AA-(lka)'; Stable Outlook
Sri Lanka rupee-denominated senior unsecured debentures: 'AA-(lka)'
Sri Lanka rupee-denominated subordinated debentures: 'A+(lka)'