Rating Cut

Mar 30, 2009 (LBO) – Fitch Ratings has downgraded the long-term rating of Singer Finance (Lanka) Limited (SFL) to BBB-(lka) from ‘BBB(lka)’. The outlook is ‘stable’. “SFL’s rating is linked to Singer Sri Lanka PLC’s (Singer), of which it is a fully-owned subsidiary, and takes into account the implied support assumed to be available from Singer, as well as its strategic importance to its parent,” Fitch Ratings said.

The downgrade of SFL’s rating follows the downgrade of Singer to ‘A-(lka)’ (A minus(lka))/Rating Watch Negative earlier this month.

SFL currently provides financing for Singer products via group loans through Singer’s dealer network. From February 2009 SFL started consumer financing services for Singer’s own manufactured products, thereby strengthening the ties between the two companies, Fitch said.

SFL contributed to 15 percent of Singer’s group pre-tax profit for the 12 months ended December 08 and 5.0 percent for 12 months ended December 2006.

SFL continued along its high growth trajectory in the 2008 financial year, with loans growing 61.8 percent for the year ended March 2008 from a small base.

Taking into account the preva