LB Finance ratings upgrade

RAM Ratings Lanka has upgraded LB Finance PLC’s long-term and short-term financial institution ratings to BBB+ and P2, from BBB and P3 respectively; the long-term rating has a stable outlook.

The rating upgrade reflects LBF’s track record of improving asset quality despite rapid expansion of its loan base.

The upgrade is also premised on the company’s healthier financial performance-reflected by its wider margins and improved profitability indicators.

RAM Ratings Lanka has also upgraded the long- and short-term ratings of LBF’s Rs 450 million unsecured subordinated redeemable debentures from BBB-/P3 to BBB/P3 respectively.

The difference of a notch between the rating of LBF’s subordinated bonds of Rs 450 million and its long-term financial institution rating reflects the subordinated nature of the former to the company’s senior unsecured obligations.

LBF is the third-largest registered finance company in Sri Lanka, accounting for 10.47 percent of the industry’s assets as at end-September 2010.