Fitch downgrades  ratings of five finance and leasing firms after 10 banks

Fitch Ratings has downgraded the National Long-Term Ratings of five Sri Lankan finance and leasing companies (FLCs) after the recent sovereign downgrade and recalibration of the agency’s Sri Lankan National Rating scale. 

The FLCs’ ratings remain on Rating Watch Negative (RWN). 

The downgrades follow similar action on 10 Sri Lankan banks, Fitch said. 

The five FLCs which got their ratings downgraded are: People’s Leasing and Finance PLC (PLC) to ‘A-(lka)’/RWN from ‘A+(lka)’/RWN; Central Finance Company PLC (CF) to ‘A-(lka)’/RWN from ‘A+(lka)’/RWN; CBC Finance LTD (CBCF) to ‘BBB+(lka)’/RWN from ‘A(lka)’/RWN; HNB Finance PLC (HNBF) to ‘BBB+(lka)’/RWN from ‘A(lka)’/RWN; and Siyapatha Finance PLC (Siyapatha) to ‘BBB+(lka)’/RWN from ‘A(lka)’/RWN.

Recalibration of the national scale is to reflect changes in the relative creditworthiness among Sri Lankan issuers following Fitch’s downgrade of Sri Lanka’s Long-Term Local Currency Issuer Default Rating (IDR) to ‘CC’ from ‘CCC’/Under Criteria Observation on 1 December 2022. 

Fitch typically does not assign Outlooks or apply modifiers to sovereigns with a rating of ‘CCC+’ or below. 

National scale ratings are a risk ranking of issuers in a particular market designed to help local investors differentiate risk. Sri Lanka’s national scale ratings are denoted by the unique identifier ‘(lka)’.