ECONOMYNEXT – Fitch Rankings has assigned Singer Finance’s proposed Sri Lankan rupee-denominated 2 billion debenture problem an anticipated nationwide long-term score of ‘BBB-(EXP)(lka)’.
The corporate plans to make use of the proceeds to strengthen its Tier 2 capital base and help loan-book growth.
“We utilized our Financial institution Score Standards to charge the proposed debentures, as we consider the prudential capital framework of Sri Lankan finance corporations is near that for banks,” Fitch said.
“This displays our baseline notching for loss severity for this debt class and our expectation of poor recoveries within the occasion of default. There isn’t any further notching for non-performance danger, because the proposed debentures don’t comprise going-concern loss-absorption.”
The complete assertion is reproduced under:
Fitch Assigns Singer Finance’s Proposed Subordinated Debt ‘BBB-(EXP)(lka)’ Score
Thu 06 Mar, 2025 – 2:05 AM ET
Fitch Rankings – Colombo/Mumbai – 06 Mar 2025: Fitch Rankings has assigned Singer Finance (Lanka) PLC’s (SFP, BBB+(lka)/Secure) proposed Sri Lankan rupee-denominated subordinated listed debentures of as much as LKR2 billion an anticipated Nationwide Lengthy-Time period Score of ‘BBB-(EXP)(lka)’.
The proposed debentures will mature in 5 years and can be listed on the Colombo Inventory Alternate. The corporate plans to make use of the proceeds to strengthen its Tier 2 capital base and help loan-book growth.
The ultimate score is topic to the receipt of ultimate documentation conforming to data already obtained.
Key Score Drivers
The proposed debentures are rated two notches under SFP’s Nationwide Lengthy-Time period Score. The devices comply with the identical construction and are rated on the identical stage as SFP’s excellent subordinated debt issued in 2021.
We utilized our Financial institution Score Standards to charge the proposed debentures, as we consider the prudential capital framework of Sri Lankan finance corporations is near that for banks. This displays our baseline notching for loss severity for this debt class and our expectation of poor recoveries within the occasion of default. There isn’t any further notching for non-performance danger, because the proposed debentures don’t comprise going-concern loss-absorption.
We upgraded SFP’s Nationwide Lengthy-Time period Score to ‘BBB+(lka)’, from ‘BBB(lka)’, in January 2025 following the improve of the mum or dad, Singer (Sri Lanka) PLC (Singer, AA-(lka)/Secure). SFP’S score displays our expectation that Singer would offer extraordinary help to SFP if wanted. This view relies on Singer’s 80% possession stake, frequent branding and a document of fairness injections. We additionally consider SFP’s rising dimension relative to its mum or dad, as this will weigh on the mum or dad’s skill to supply help.
Please check with our commentary, Fitch Upgrades 10 Sri Lankan NBFIs’ Ratings, Affirms 8 Following National Scale Recalibration.
RATING SENSITIVITIES
Components that May, Individually or Collectively, Result in Adverse Score Motion/Downgrade
A downgrade of SFP’s Nationwide Lengthy-Time period Score would result in a downgrade of the anticipated subordinated debt score.
Components that May, Individually or Collectively, Result in Optimistic Score Motion/Improve
An improve of SFP’s Nationwide Lengthy-Time period Score would result in an improve of the anticipated subordinated debt score.
Date of Related Committee
23-Jan-2025
REFERENCES FOR SUBSTANTIALLY MATERIAL SOURCE CITED AS KEY DRIVER OF RATING
The principal sources of data used within the evaluation are described within the Relevant Standards.
Public Rankings with Credit score Linkage to different scores
SFP’s score is linked to Singer’s Nationwide Lengthy-Time period Score
(Colombo/Mar6/2025)
