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Fitch Rates Central Finance's Senior Debt Final 'A+(lka)'
May 15, 2015 / 9:53 AM / 3 years ago

Fitch Rates Central Finance's Senior Debt Final 'A+(lka)'

(The following statement was released by the rating agency) COLOMBO/TAIPEI, May 15 (Fitch) Fitch Ratings has assigned Central Finance Company Plc's (CF; A+(lka)/Stable) issue of senior secured redeemable debentures of up to LKR3.0bn a final National Long-Term Rating of 'A+(lka)' The final rating is the same as the expected rating assigned on 8 April 2015, and follows the receipt of documents conforming to information already received. The debenture will have a maturity of between three to five years, carry a fixed-rate coupon, and will be listed on the Colombo Stock Exchange. CF expects to use the proceeds to fund lending growth, reduce structural maturity mismatches and diversify the funding mix. KEY RATING DRIVERS The issue has been rated at the same level as CF's National Long-Term Rating. Fitch has not provided any rating uplift for the collateralisation as the secured notes' recovery prospects are considered to be average and comparable with those of the unsecured notes in a developing legal system. CF's rating reflects its strong capitalisation, which is supported by robust profitability and high profit retention. Counterbalancing these strengths are the pressure on loan quality and its low provisioning levels compared with its peers'. The rating also captures CF's high margins, which are supported by the company's strength in raising funds at relatively low rates through the solid franchise developed over a long operating history. RATING SENSITIVITIES The rating on the issue will move in tandem with CF's National Long-Term Rating. For more details on the rating drivers and sensitivities of CF, see the rating action commentary "Fitch Affirms Sri Lanka's Central Finance at 'A+(lka)'", dated 16 September 2014 on Contact: Primary Analyst Nadika Ranasinghe Vice President +94 112541900 Fitch Ratings Lanka Limited Level15-04, East Tower, World Trade Center, Colombo 01, Sri Lanka Secondary Analyst Jeewanthi Malagala Analyst +94 112541900 Committee Chairperson Jonathan Lee Senior Director +886 2 8175 7601 Media Relations: Bindu Menon, Mumbai, Tel: +91 22 4000 1727, Email: CF has a 1.79% equity stake in Fitch Ratings Lanka Ltd. No shareholder other than Fitch, Inc. is involved in the day-to-day rating operations of, or credit reviews undertaken by, Fitch Ratings Lanka Ltd. Note to editors: Fitch's National ratings provide a relative measure of creditworthiness for rated entities in countries with relatively low international sovereign ratings and where there is demand for such ratings. The best risk within a country is rated 'AAA' and other credits are rated only relative to this risk. National ratings are designed for use mainly by local investors in local markets and are signified by the addition of an identifier for the country concerned, such as 'AAA(lka)' for National ratings in Sri Lanka. Specific letter grades are not therefore internationally comparable. Additional information is available at Applicable criteria, 'Global Non-Bank Financial Institutions Rating Criteria', dated 28 April 2015, 'National Scale Ratings Criteria', dated 30 October 2013 and 'Evaluating Corporate Governance', dated 12 December 2012 are available at Applicable Criteria and Related Research: Global Non-Bank Financial Institutions Rating Criteria here National Scale Ratings Criteria here Evaluating Corporate Governance here Additional Disclosure Solicitation Status here ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: here. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEBSITE 'WWW.FITCHRATINGS.COM'. PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE 'CODE OF CONDUCT' SECTION OF THIS SITE. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE.

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