Ceylon Asset Management responds to Fitch action

Ceylon Asset Management yesterday issued the following response to the article ‘Fitch Withdraws rating on Ceylon Income Fund’.

Fitch Ratings has announced the withdrawal of the rating from Ceylon Income Fund – The Rupee Corporate Bond Fund due to the 32% exposure to Lanka Rating Agency (LRA) rated Corporate Bonds, following the suspension of LRA by the Securities and Exchange Commission (SEC). The rating has been withdrawn in the absence of a monitoring process by a recognised rating agency. 

These assets continue to be listed on the Colombo Stock Exchange (CSE), despite the LRA suspension by the SEC. Under the CSE listing rules it is mandatory for listed debentures to have a valid rating in order to be listed on the CSE.

Ceylon Asset Management highlights that the bonds are of investment grade, and the LRA suspension is beyond the control of the fund, the fund manager and the underlying listed company. 

Ceylon Asset Management assures investors of the Ceylon Income Fund that the fund continues to invest in investment grade securities that are listed on the CSE. “