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Fitch Rates DFCC Bank's Senior Debentures 'AA-(lka)( EXP)'
November 3, 2015 / 6:32 AM / 2 years ago

Fitch Rates DFCC Bank's Senior Debentures 'AA-(lka)( EXP)'

(The following statement was released by the rating agency) COLOMBO, November 03 (Fitch) Fitch Ratings has today assigned DFCC Bank PLC's (DFCC; AA-(lka)/Stable) proposed senior unsecured debentures of up to LKR10bn an expected National Long-Term Rating of 'AA-(lka)(EXP)'. The proposed debentures, which will have tenors of four and six years and carry fixed and floating coupons, will be listed on the Colombo Stock Exchange. DFCC expects to use the proceeds to reduce asset and liability maturity mismatches. The final rating is subject to the receipt of final documentation conforming to information already received KEY RATING DRIVERS The proposed senior debentures are rated in line with DFCC's National Long-Term Rating. The issues rank equally with the claims of the bank's other senior unsecured creditors. DFCC's rating is driven by its high capitalisation and its developing commercial banking franchise. RATING SENSITIVITIES The ratings on the proposed debentures will move in tandem with DFCC's National Long-Term Rating. A rating upgrade for DFCC would be contingent on the bank achieving a significantly stronger commercial banking franchise while maintaining strong credit metrics. DFCC's rating could be downgraded if there is a sustained and substantial increase in risk appetite that could materially weaken its strong capital position. A full list of DFCC's ratings follows: Long-Term Foreign-Currency Issuer Default Rating (IDR): 'B+'; Outlook Stable Long-Term Local-Currency IDR: 'B+'; Outlook Stable 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)' Proposed Sri Lanka rupee-denominated senior unsecured debentures: 'AA-(lka)(EXP)' Basel II-compliant Sri Lanka rupee-denominated subordinated debentures: 'A+(lka)' Contact: Primary Analyst Rukshana Thalgodapitiya Vice President +94 1 1254 1900 Fitch Ratings Lanka Limited Level 15-04, East Tower, World Trade Center Colombo 01, Sri Lanka Secondary Analyst Jeewanthi Malagala Analyst +941 1254 1900 Committee Chairperson Sabine Bauer Senior Director +852 2263 9966 Date of Relevant Rating Committee: 7 July 2015 Media Relations: Bindu Menon, Mumbai, Tel: +91 22 4000 1727, Email: DFCC has a 1.79% equity stake in Fitch Ratings Lanka Ltd. No shareholder other than Fitch, Inc. is involved in the day-to-day rating operations of, or credit reviews undertaken by, Fitch Ratings Lanka Ltd. Note to editors: Fitch's National ratings provide a relative measure of creditworthiness for rated entities in countries with relatively low international sovereign ratings and where there is demand for such ratings. The best risk within a country is rated 'AAA' and other credits are rated only relative to this risk. National ratings are designed for use mainly by local investors in local markets and are signified by the addition of an identifier for the country concerned, such as 'AAA(lka)' for National ratings in Sri Lanka. Specific letter grades are not therefore internationally comparable. Additional information is available on Applicable Criteria Evaluating Corporate Governance (pub. 12 Dec 2012) here Global Bank Rating Criteria (pub. 20 Mar 2015) here National Scale Ratings Criteria (pub. 30 Oct 2013) here Additional Disclosures Solicitation Status here Endorsement Policy here ail=31 ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: here. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEBSITE 'WWW.FITCHRATINGS.COM'. PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE 'CODE OF CONDUCT' SECTION OF THIS SITE. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE.

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