HNB raises US$ 100 mln long-term debt from China Development Bank

Hatton National Bank PLC on the back of a roadshow to China last year has recently concluded a loan agreement to raise US$ 100 million through the China Development Bank (CDB), officials said.

Jonathan Alles, Managing Director / CEO of HNB told the Business Times, that this loan obtained at attractive rates will support HNB’s balance sheet growth. These discussions with the Chinese bank were preceded by a high-level delegation to China in which HNB and five other banks – Bank of Ceylon, Peoples’ Bank, Commercial Bank, HNB and Seylan had accompanied the former Central Bank (CB) Governor, Arjuna Mahendran in mid-February 2016. The team met with CDB, Asian Infrastructure and Investment Bank, Agricultural Bank of China and China Communications Bank among others. Mr. Alles said that it’s good for Sri Lanka to forge ties with new markets, at new and attractive interest rates.

The 5-year term loan with CDB marks the third such agreement between the two parties as part of the bank’s concerted efforts to secure international funding.

“We are very pleased with our most recent agreement with the China Development Bank and with the strong relationship we have developed in recent years. Transactions of this nature clearly demonstrate the confidence placed in HNB by international investors and our ability to raise funds from international sources at attractive rates. These funds will be utilised towards growing HNB’s balance sheet thereby placing the bank on an even stronger footing moving forward,” Mr. Alles said.

The most recent agreement for $100 million was the latest loan raised from CDB where the bank had previously secured a $ 99 million In 2015, HNB had raised $185 million from ADB, DEG and Proparco, and a further Rs. 13 billion in 2016 by way of subordinated debentures.