Fitch rates Central Finance’s listed senior debt final ‘A+’

Fitch Ratings has assigned Sri Lanka-based Central Finance Company PLC’s (CF, A+(lka)/Stable) listed senior unsecured redeemable debentures of up to Rs. 2 b a final National Long-Term rating of ‘A+(lka)’.

The assignment of the final rating follows the receipt of final documents conforming to information previously received. The final rating is at the same level as the expected rating assigned on 27 March 2013 (see ‘Fitch Rates Central Finance Company’s proposed senior ‘A+(lka)’on www.fitchratings.com).

The debentures are rated in line with CF’s National Long-term Rating of ‘A+(lka)’, as they rank equally with the company’s senior unsecured debt.

Key Rating Drivers

CF’s ratings factor in its strong franchise and capitalisation, supported by robust profitability. Its franchise is the result of its 55-year-long operating history. CF is one of the largest licensed finance companies (LFC) in Sri Lanka with a 9.5% share of assets at end-2012.

Rating Sensitivities

A rating upgrade may result from greater product and funding diversity together with improved funding flexibility commensurate with higher category peers. Conversely, a sustained weakening in capitalisation and profitability due to deterioration in asset quality could result in a downgrade.

Established in 1957, CF is 21.9% held by the Wijenaike family – the founders of the company. Corporate Services Ltd. holds a further 16.11% and the remainder is publicly held.