Fitch rates Singer Finance notes BBB(lka)

Fitch Ratings said it assigned a final national long-term rating of BBB(lka) to Singer Finance (Lanka) plc’s proposed senior secured redeemable debentures of up to 1.5 billion in Sri Lankan rupee.

The assignment of the final rating follows receipt of documents conforming to information already received and the final rating is the same as the expected rating assigned in February, Fitch said.

The company has a national long-term rating of BBB(lka) and stable outlook. Its outstanding senior unsecured debentures have a BB(lka) rating.

The issue will have two tranches that have bullet principal repayments in the third and fourth years. The debentures carry a fixed-rate coupon paid semi-annually and they will be listed on Colombo Stock Exchange, the agency said.

The proceeds will be used to fund the company’s lending growth, lengthen maturities of its liabilities and reduce structural maturity mismatches, Fitch said.

The issue was rated at the same level as the company’s national rating and the company is rated two notches below its parent, Singer (Sri Lanka) plc, the agency said.

This reflects Singer’s majority ownership in Singer Finance, the common Singer brand, along with Singer Finance’s limited role in the group, providing financing for only a low proportion of Singer’s sales, Fitch said.

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