ECONOMYNEXT – Fitch Ratings has given Sri Lanka’s Siyapatha Finance’s proposed subordinated listed debentures of up to 3.75 billion rupees an expected National Long-Term Rating of ‘BBB+(EXP)(lka)’.
The proposed debentures are rated two notches below Siyapatha’s National Long-Term Rating, the ratings agency said.
“This reflects our baseline notching for loss severity for this debt class and our expectation of poor recoveries in the event of default.”
The statement is reproduced below:
Fitch Assigns Siyapatha Finance’s Proposed Subordinated Debt ‘BBB+(EXP)(lka)’ Rating
Fitch Ratings – Colombo – 18 Nov 2025: Fitch Ratings has assigned Siyapatha Finance PLC’s (A(lka)/Stable) proposed Sri Lankan rupee-denominated subordinated listed debentures of up to LKR3.75 billion an expected National Long-Term Rating of ‘BBB+(EXP)(lka)’.
The proposed debentures will mature in five years and will be listed on the Colombo Stock Exchange. The company plans to use the proceeds to strengthen its Tier 2 capital base and support loan-book expansion.
The final rating is subject to the receipt of final documentation conforming to information already received.
Key Rating Drivers
The proposed debentures are rated two notches below Siyapatha’s National Long-Term Rating. This reflects our baseline notching for loss severity for this debt class and our expectation of poor recoveries in the event of default.
We applied our Bank Rating Criteria to rate the proposed debentures, as we believe the prudential capital framework of Sri Lankan finance companies is close to that for banks. The instruments will follow the same structure as Siyapatha’s outstanding subordinated debt issued in 2021. There is no additional notching for non-performance risk, as the proposed debentures do not contain going-concern loss-absorption.
Siyapatha’s National Long-Term Rating was upgraded to ‘A(lka)’ from ‘BBB+(lka)’ on 24 January 2025 following the upgrade of parent Sampath Bank PLC’s (AA-(lka)/Stable) National Long-Term Rating to ‘AA-(lka)’ from ‘A(lka)’.
Siyapatha’s rating reflects Fitch’s expectation that Sampath would provide extraordinary support to the fully-owned financing subsidiary, if needed. Siyapatha is rated two notches below its parent because of its limited role in the parent group’s core business.
Please refer to our commentary, Fitch Upgrades 10 Sri Lankan NBFIs’ Ratings, Affirms 8 Following National Scale Recalibrationpublished 24 January 2025, for details on Siyapatha’s key rating drivers and sensitivities.
RATING SENSITIVITIES
Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade
A downgrade of Siyapatha’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 Siyapatha’s National Long-Term Rating would lead to an upgrade of the expected subordinated debt rating.
Date of Relevant Committee
23 January 2025
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.
Public Ratings with Credit Linkage to other ratings
Siyapatha’s rating is linked to Sampath’s National Long-Term Rating.
(Colombo/Nov19/2025)
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