Fitch rates Central Finance Co's Senior Debt 'A+(lka)'

Fitch Ratings Lanka has assigned Central Finance Company Plcs (CF) proposed senior debentures of up to Rs. 600 million a National Long-Term rating of 'A+(lka)'. A list of outstanding ratings is provided at the end of this commentary.

The issue is rated at the same level as CF's National Long-Term rating of 'A+(lka)' which has a Stable Outlook. This is in compliance with Fitch's rating criteria on senior unsecured bond instruments of financial institutions.

The proposed instrument will rank 'pari passu ' with CF's senior creditors. The debentures carry maturity options of five years, and will be issued at a fixed interest rate, helping CF to reduce interest rate mismatches between its assets and liabilities and fund loan growth.

CF's rating factors in its relatively strong financial profile in Sri Lanka's registered finance company sector. The rating also takes into account CF's lack of product and funding diversity in relation to banks - an inherent limitation of the RFC business model.