Fitch Ratings has assigned Senkadagala Finance PLC’s (SFC: BBB+(lka)/Stable) issue of senior unsecured redeemable debentures of up to Rs.3 billion a final national long-term rating of ‘BBB+(lka) ‘.
The final rating is the same as the expected rating assigned on June 13, 2016 and follows the receipt of documents conforming to information already received. The amount has been increased to Rs.3 billion from Rs.2 billion.
The debentures will have tenors of two to four years and carry fixed and floating coupons. The debentures are to be listed on the Colombo Stock Exchange and the company plans to use the proceeds to fund loan growth, diversify its funding mix and reduce structural maturity mismatches.
The proposed debentures are rated at the same level as SFC’s national long-term rating as they will constitute direct, unconditional, unsecured and unsubordinated obligations of SFC.
SFC’s rating reflects the satisfactory credit profile that it has maintained through economic cycles, its relatively strong franchise amongst finance companies in Sri Lanka and access to longer-term institutional funding. These are counterbalanced by its deposit franchise and capitalisation, which are weaker than higher-rated peers.
The rating on the proposed debentures will move in tandem with SFC’s national long-term rating.