Fitch Ratings has assigned
The final rating is the same as the expected rating assigned on
The proposed debentures will mature in five years and will be listed on the
The bank expects the proposed debentures to qualify as Basel III-compliant regulatory Tier 2 capital. The debentures include a non-viability clause whereby they will convert to ordinary voting shares subject to the occurrence of a trigger event, as determined by the Monetary Board of
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 notes do not incorporate going-concern loss-absorption features.
NDB'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.
The RWN on the subordinated debt stems from the RWN on the corresponding National Long-Term Rating. Fitch downgraded NDB's National Long-Term Rating 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 will lead to a downgrade of the 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 will lead to an upgrade of the subordinated debt rating. However, there is limited scope for upward rating action given the RWN.
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