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Debenture

Apr 18, 2013 (LBO) - Sri Lanka's Senkadagala Finance Plc (SFC) will sell one billion rupees of 3 and 4-year debt which have been given an expected 'BBB+(lka)' rating, Fitch Ratings said. The rating has a stable outlook. BBB+(lka) is an investment grade rating.

"The proposed debentures will be issued in two tranches with a maturity of three and four years, while coupon payments will be at fixed and floating rates," Fitch Ratings said.

"The notes do not contain any deferral clauses. SFC expects to use the proceeds to fund its ongoing lending activities and to help reduce maturity mismatches between its assets and liabilities."

Fitch said the rating reflected the finance company's long operating history and sound credit profile through economic cycles, supported by credit controls, low refinancing risk and high profitability compared with domestic peers.

But its profile was constrained by elevated financial risk, shown in lower capital adequacy. as reflected in lower capitalisation in 2012, the rating agency said.

But its Tier 1 CAR (after including retained profits) had improved to an estimated 14.4 percent during the first nine months of the 2013 financial year f

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