Fitch Ratings has assigned
The proposed debentures, which will have maturities of five, seven and 10 years, will be listed on the
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 of 'A(lka)'. This reflects Fitch's baseline notching for loss severity for this type of debt and our expectations of poor recoveries. There is no additional notching for non-performance risks, as the proposed notes do not incorporate going-concern loss-absorption features.
HNB's National Long-Term Rating is used as the anchor rating for this instrument because the rating reflects the bank's standalone financial strength and best indicates the risk of the bank becoming non-viable.
Fitch affirmed HNB's National Long-Term Rating of 'A(lka)', 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
A downgrade of the bank's National Long-Term Rating would lead to a downgrade of the expected subordinated debt rating.
Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade
An upgrade of the bank's National Long-Term Rating would lead to an upgrade of the expected subordinated debt rating.
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.
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