NDB’s proposed listed debt up to Rs.8bn rated ‘A-(lka)(EXP)

Fitch Ratings has assigned ‘A-(lka)(EXP) rating for National Development Bank’s proposed debenture issue to raise up to Rs.8 billion.

The debentures will have maturities of five and seven years, and will be listed on the Colombo Stock Exchange.
NDB plans to use the proceeds to strengthen its Tier 2 capital base and support loan book expansion. 

The proposed debentures include a non-viability clause whereby they will convert to ordinary voting shares if so determined by the Mofnetary Board of Sri Lanka. 

NDB recently infused Rs.9.46 billion raised via a combination of a rights issue and private placement with Norfund, the Norwegian Investment Fund for developing countries, bolstering its core capital and Tier I capital adequacy. 

Also, in September last year, NDB raised Rs.7.3 billion via the issuance of Basel III compliant – Tier II, listed, rated, unsecured, subordinated redeemable five-year debentures of Rs.100 each, with a non-viability conversion feature.

By end-June, the bank’s Tier I and Tier II capital ratios stood at 10.43 percent and 14.73 percent respectively when the regulatory minimums were at 8.0 percent and 12.0 percent. 

In the April-June quarter, the bank reported earnings of Rs.7.08 a share or Rs.1.73 billion, up by a robust 54.5 percent from the same period last year.