Fitch Rates Sampath Bank’s Proposed Basel III Subordinated Debentures Final ‘A(lka)’

Fitch Ratings assigned a final National Long-Term Rating of A(lka) to Sampath Bank PLC’s proposed subordinated debentures, with an issue size of up to LKR10 billion. The instruments are Sri Lankan rupee-denominated and are to mature in five and seven years.

The debentures are designed to comply with Basel III and qualify as regulatory Tier 2 capital. Sampath intends to use the funds to support its Tier 2 capital base, maintain capital adequacy compliance and fund growth in its loan book. Hiru News reported that the Colombo Stock Exchange had given in-principle approval for the issuance; the reports say the debentures are to be listed there.

Fitch placed the debt rating two levels below Sampath’s National Long-Term Rating of AA-(lka), citing its standard assessment of potential losses and expectations of poor recovery for this type of debt. It said no further adjustment was made for non-performance risk because the instruments lack going-concern loss-absorption features. A clause provides for conversion into ordinary voting shares if the Central Bank of Sri Lanka’s Governing Board determines that a non-viability trigger has occurred.

The final rating matches the expected rating Fitch issued on 10 September 2026, following receipt of documents consistent with information already provided. Fitch said a downgrade of Sampath’s National Long-Term Rating would lead to a downgrade of the subordinated debt rating. It had affirmed the bank’s rating on 17 August 2026.

Written automatically by AI from the outlets’ own reports, and not reviewed by an editor. It can be wrong — the original report is the authority.