April 26, 2012 (LBO) — Fitch Ratings Lanka on Thursday affirmed Multi Finance PLC’s national long-term rating at ‘B+(lka)’ with a stable outlook. The agency has also affirmed and withdrawn the ‘B(lka)’ rating on Multi Finances proposed subordinated debenture issue of up to 100 million rupees, as the issue did not proceed as previously envisaged.
The ratings reflect Multi Finance’s small size (asset base of 990 million rupees at end-2011) relative to local sector peers and small franchise.
The ratings also reflect the company’s recent rapid loan growth, modest asset quality relative to local peers, and comfortable capitalisation in relation to its operations.
The risk evaluator said the ratings may be downgraded upon a significant or sustained weakening in liquidity and/or capitalisation due to either aggressive loan growth or upstreaming of cash flows.
Conversely, an increase in Multi Finance’s scale of operations without a significant compromise on asset quality or capitalisation could result in an upgrade of its ratings.
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Fitch Ratings Lanka has affirmed Multi Finance PLC’s (MFP) Nati