Fitch rates Senkadagala Finance’s Rs. 1.75 b debenture final ’BBB’

Monday, 19 August 2019 00:31 - - {{hitsCtrl.values.hits}}

Fitch Ratings Lanka has assigned Senkadagala Finance PLC's (Senka, BBB+ (lka)/Stable) subordinated unsecured debentures a final National Long-Term Rating of ‘BBB (lka)'.

The issuance totals Rs. 1.75 billion, with the debentures to mature in five years and carry fixed coupons. The debentures are to be listed on the Colombo Stock Exchange. The debenture issue will improve Senka's Tier 2 capital base and the proceeds will be used to fund loan-book growth.

The final rating is the same as the expected rating assigned on 2 April 2019 and follows the receipt of documents conforming to information already received.

The subordinated debentures are rated one notch below Senka's National Long-Term Rating to reflect the subordination to senior unsecured obligations.

Senka's National Long-Term Rating was affirmed on 1 July 2019 and reflects its high risk appetite stemming from its SME-centric loan book and lower financial flexibility compared with peers due to a heavy reliance on secured wholesale funding. This offsets any potential benefits stemming from Senka's established franchise in the domestic vehicle-financing sector and well-matched maturity gaps. The rating of the notes will move in tandem with Senka's National Long-Term Rating.

An upgrade of Senka's rating is contingent upon the company sustaining stronger capital levels and improved financial flexibility through a more robust deposit franchise. Senka's rating could be downgraded if asset quality weakens, leading to a significant decline in capitalisation or excessive asset encumbrance.

Discover Kapruka, the leading online shopping platform in Sri Lanka, where you can conveniently send Gifts and Flowers to your loved ones for any event including Valentine ’s Day. Explore a wide range of popular Shopping Categories on Kapruka, including Toys, Groceries, Electronics, Birthday Cakes, Fruits, Chocolates, Flower Bouquets, Clothing, Watches, Lingerie, Gift Sets and Jewellery. Also if you’re interested in selling with Kapruka, Partner Central by Kapruka is the best solution to start with. Moreover, through Kapruka Global Shop, you can also enjoy the convenience of purchasing products from renowned platforms like Amazon and eBay and have them delivered to Sri Lanka.