Sept 30, 2008 (LBO) – Sri Lanka’s Mercantile Investment Limited (MIL), a registered finance company, is raising 100 million rupees through a commercial paper which has been given a rating of ‘P1’, RAM Ratings said.
RAM Ratings said MIL has a long-term credit rating of ‘A’ and short-term rating of ‘P1’. RAM has also confirmed MIL’s existing commercial paper of 250 million rupees.
RAM said the rating was supported by MIL’s capitalization and liquidity position.
“The assigned rating is at par with MIL’s short-term financial institution rating, as the proposed issuance ranks pari passu with the Company’s other senior unsecured creditors,” RAM said.
“However, the outlook on it long-term rating remains negative, as its financial performance and asset quality have stayed soft; the short term rating is however unlikely to change unless there is a drastic deterioration in liquidity and funding.”
MIL is the fourth-largest finance company in Sri Lanka, accounting for about six percent of industry assets at the end of the year ending March 2008.
RAM says the indust