📈 Fitch Rates MBSL’s Proposed Rs. 1 Bn Subordinated Debt at ‘BBB+(EXP)(lka)’

• Overall Issue Details: Fitch Ratings has assigned an expected National Long-Term Rating of ‘BBB+(EXP)(lka)’ to Merchant Bank of Sri Lanka & Finance PLC’s (MBSL) proposed LKR-denominated subordinated listed debentures of up to Rs. 1 Bn. • Structure & Use of Proceeds: The debentures will have a 5-year maturity and will be listed on the Colombo Stock Exchange. Proceeds will be used to comply with regulatory capital adequacy requirements. • Rating Rationale & Notching: The issue is rated two notches below MBSL’s National Long-Term Rating of ‘A(lka)/Stable’, reflecting baseline loss-severity expectations for subordinated debt and anticipated poor recoveries in default. Fitch applied bank rating criteria as Sri Lanka's finance company capital framework closely mirrors banking standards. • Parental Support: MBSL’s rating is anchored by expected extraordinary support from parent entity Bank of Ceylon (BOC, ‘AA-(lka)/Stable’), which holds an 84.4% stake, provides equity support, and maintains strategic board control. • Status: Rating is provisional based on preliminary data and subject to final conforming documentation.