Tuesday, 24 September 2013 00:00
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Fitch Ratings has assigned Sri Lanka-based National Development Bank PLC’s (NDB) proposed issue of USD-denominated notes an expected rating of ‘B+(EXP)’.
The final rating is contingent upon receipt of final documents conforming to information already received.
Key rating drivers
The notes are rated at the same level as NDB’s Long-Term Foreign Currency Issuer Default Rating (IDR) of ‘B+’ as they constitute unsecured and unsubordinated obligations of the issuer.
In line with Fitch’s criteria, Recovery Ratings are assigned to entities with an IDR of ‘B+’ or below. Consequently, Fitch has assigned a Recovery Rating of ‘RR4’ to the notes to reflect average recovery prospects.
NDB’s Long-Term IDR reflects its standalone risk profile and satisfactory track record as a project financing institution with historically stronger capitalisation, asset quality and profitability compared with other major financial institutions in Sri Lanka. However, these strengths are counterbalanced by potential risks from NDB’s aggressive loan growth in recent years and its expansion into other areas of commercial lending as it seeks to become a full-service universal bank.
Rating sensitivities
Any change in NDB’s IDRs would impact the rating of the proposed USD notes.
Full list of NDB’s ratings
Long-Term Foreign and Local-Currency IDRs ‘B+’; Stable Outlook
