Senkadagala Finance Rs.2bn debt issue rated ‘BBB+(lka)’

Fitch Ratings has assigned Senkadagala Finance PLC’s (BBB+(lka)/stable) proposed issue of senior unsecured redeemable debentures of up to Rs.2 billion an expected National long-term rating of ‘BBB+(lka)(EXP)’.
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 final rating is subject to the receipt of final documentation conforming to information already received.
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 compared with higher-rated peers.