Fitch rates LB Finance’s outstanding debentures BBB+(lka)

Dec 22, 2015 (LBO) – Fitch Ratings has assigned LB Finance’s outstanding rupee denominated subordinated debentures a National Long Term Rating of ‘BBB+(lka)’.

The debentures mature in 2016, 2017 and 2018 and have total value of 2.545 billion rupees.

A full list of LB’s ratings is given below.

KEY RATING DRIVERS
The outstanding subordinated debentures are rated one notch below LB’s National Long Term Rating to reflect their subordination to senior unsecured creditors.

LB’s National Long Term

Rating reflects its established franchise among licensed finance companies, whose higher yielding exposures have supported sound profitability. The rating also captures its relatively higher risk appetite compared to peers as indicated by its exposure to gold backed loans. Fitch views LB’s capital as satisfactory while its revenue generation is sound.

RATING SENSITIVITIES

The rating on the outstanding debentures will move in tandem with LB’s National Long Term Ratings.

These ratings are primarily sensitive to changes in LB’s capitalisation, risk appetite and liquidity position.
A full list of LB’s ratings follows:

National Long Term Rating: ‘A(lka)’; Outlook Stable

The following outstanding Basel II compliant subordinated debentures are rated ‘BBB+(lka)’:

LKR215.0m 12.68% unlisted subordinated debentures due 2016
LKR100.0m 12.30% unlisted subordinated debentures due 2016
LKR230.0m 12.30% unlisted subordinated debentures due 2017
LKR640.1m 14.00% listed subordinated debentures due 2018
LKR757.0m 14.50% listed subordinated debentures due 2018
LKR602.9m 15.00% listed subordinated debentures due 2018