Fitch rates Singer debentures A+

Fitch Ratings said it assigned a national long-term rating of A+(lka) to Singer Sri Lanka's proposed LKR300 million debenture issue and affirmed the A+(lka) ratings assigned to all its outstanding senior unsecured debentures.

The outlook is stable.

The ratings continue to be supported by Singer's position as the country's largest retailer of consumer durables, its strong and sustainable sales growth supported by the profitable and well-managed consumer financing operation and good earnings retention. The company was able to sustain EBITDA margins at about 11.2%, offsetting the affect of increased collection commissions and lease-rentals on its showrooms, Fitch said.

Much of the company's debt is related to its in-house consumer financing operation. Fitch said the leverage calculated for its retailing business on a stand-alone basis remains appropriate for Singer's current rating after taking into account the good quality of the consumer loan book and the systems and process in place.

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