‘F1(lka)’ rating for LOLC’s commercial paper
Fitch Ratings Lanka has assigned a National Short-term rating of
‘F1(lka)’ to Lanka Orix Leasing Company (LOLC) Plc’s proposed commercial
paper issuance of up to Rs. 500 million.
A National Short-term rating of ‘F1(lka)’ indicates the strongest
capacity for timely payment of short term financial commitments relative
to other issuers or issues in the same country.
Where the credit risk is particularly strong, a “+” is added to the
assigned rating within the ‘F1’ category.
The assigned rating reflects the absence of an adverse shift in the
maturities of the company’s interest bearing assets and liabilities, as
well as its good access to borrowings from local banks.
Fitch also takes comfort from the level of committed but undrawn
funding lines that the company maintains, which as at January 24
amounted to Rs. 620m, or 1.24x the principal of the proposed issuance.
However, the short-term rating on the notes is constrained by LOLC’s
inability, as a non-bank financial institution, to access the liquidity
window of the Central Bank of Sri Lanka.
The rating on the notes is also credit linked to LOLC’s National
Long-term rating of ‘A(lka)’/Stable, and could be affected by changes to
the latter.
LOLC is Sri Lanka’s pioneer specialised leasing company and was
founded in 1980. Raja Nanayakkara and his family acquired a controlling
interest in LOLC in 2002 and currently hold over
54% of its equity, while ORIX and the general public hold 30% and
16%, respectively. |