Fitch assigns Siyapatha finance’s subordinated debt final ‘BBB+(lka)’

Fitch Ratings Lanka has assigned Siyapatha Finance PLC’s subordinated redeemable debentures of up to LKR one billion a final national long-term rating of ‘BBB+(lka)’.

The assignment of the final rating follows the receipt of final documents that conform toinformation previously received. The final rating is at the same level as the expected ratingassigned on 21 July 2017.

The debentures will have a five-year tenor with bullet principal repayment at maturity. Coupon payments will be made annually at a fixed rate. The debentures will be listed on the Colombo Stock Exchange. Siyapatha expects to use the proceeds to strengthen its regulatory Tier 2 capital and to fund its loan book. The debentures are rated one notch below Siyapatha’s National long-term rating to reflect their subordination to senior unsecured creditors.

Siyapatha’s National long-term rating was last affirmed at ‘A-(lka)’ with a Negative Outlook on21 July 2017. Siyapatha’s rating reflects Fitch’s view that support would be forthcoming from itsparent, Sampath Bank PLC (A+(lka)/Negative), which owns 100 percent of Siyapatha and is involved inthe strategic direction of Siyapatha through board representation. Siyapatha is rated twonotches below its parent because of Siyapatha’s limited contribution to the group’s corebusinesses; the group leasing book accounted for just seven percent of group advances at end-2016, ofwhich Siyapatha provided 42 percent.