Fitch Ratings has assigned
The proposed debentures, which will have maturities of five and seven years, will be listed on the
The bank expects the proposed debentures to qualify as Basel III-compliant regulatory Tier 2 capital. The debentures include a non-viability clause whereby they convert to ordinary voting shares subject to the occurrence of a trigger event, as determined by the Monetary Board of
The final rating is subject to the receipt of final documentation conforming to information already received.
Key Rating Drivers
Fitch rates the proposed Basel III Tier 2 notes two notches below the bank's National Long-Term Rating to reflect Fitch's baseline notching for loss severity for this type of debt and expectation of poor recoveries. There is no additional notching for non-performance risk, as the proposed notes do not incorporate going-concern loss-absorption features.
Seylan's National Long-Term Rating is used as the anchor rating for the instrument, because the rating reflects the bank's standalone financial strength and best indicates the risk of the bank becoming non-viable.
Fitch affirmed Seylan's National Long-Term Rating, removed it from Rating Watch Negative and assigned a Stable Outlook on
Rating Sensitivities
Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade
Seylan's subordinated debt would be downgraded if the bank's National Long-Term Rating is downgraded.
Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade
Seylan's subordinated debt would be upgraded if the bank's National Long-Term Rating is upgraded.
Date of Relevant Committee
REFERENCES FOR SUBSTANTIALLY MATERIAL SOURCE CITED AS KEY DRIVER OF RATING
The principal sources of information used in the analysis are described in the Applicable Criteria.
RATING ACTIONS
Entity / Debt
Rating
subordinated
Natl LT
BBB(EXP)(lka)
Expected Rating
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