Fitch rates Singer's proposed commercial paper

Fitch Ratings-Colombo/Mumbai/Singapore-20 April 2012: Fitch Ratings Lanka has assigned Singer (Sri Lanka) PLC's (Singer) proposed commercial paper (CP) issue of up to Rs. one billion a National Short-Term rating of 'F1(lka)'. Fitch has also assigned Singer's senior unsecured notes of up to Rs. 500 million a National Long-term rating of 'A(lka)' with Stable Outlook.

The ratings reflect Singer's market position as one of Sri Lanka's largest consumer durables retailers, as well as its established franchise and extensive distribution network. The ratings also reflect the company's multi-brand product portfolio that is diversified across price points and its well-managed financing operations. Also, Singer has had access to funding from banks, and has been regularly accessing local capital markets to raise debt. According to the company, proceeds from the proposed CP will be used to refinance its short-term debt, and the issue is likely to have a one-year tenor.

The proposed issue of senior unsecured notes is to be used to replace maturing notes and is expected to have a three-year tenor. At end-2011, Singer had cash and cash equivalents of Rs. 365 million and undrawn facilities of Rs. 2.1 billion, against debt maturities of Rs. 4.3 billion due within one year. Singer's total debt amounted to Rs. 5.1 billion at end-2011.