July 03, Colombo: Fitch Ratings has affirmed the National Long-Term Ratings of the following four Sri Lankan finance and leasing companies:
-AMW Capital Leasing And Finance PLC (AMWCL) at ‘BBB(lka)’; Outlook Negative
-Abans Finance PLC at ‘BB+(lka)’; Outlook Negative
-Fintrex Finance Limited at ‘B+(lka)’; Outlook Stable
-Bimputh Finance PLC at ‘B+(lka)’; Outlook Negative
In addition, Fitch has maintained the ‘BB-(lka)’ rating on Ideal Finance Limited on Rating Watch Positive (RWP).
KEY RATING DRIVERS
AMWCL’s National Long-Term Rating is driven by Fitch’s expectation that its 90% parent, Associated Motorways Private Limited (AMW), will extend extraordinary support, if needed. We believe the finance company is strategically important to its parent, which is a large importer of motor vehicles in Sri Lanka. This is based on AMWCL’s role in the group, the common AMW brand and reputational damage to AMW should AMWCL default.
Fitch sees the synergies between the two companies as high because a large share of AMWCL’s advances are provided to clients to purchase AMW products. AMW set up AMWCL in 2006 with the objective of supporting its core business.
We see AMWCL’s intrinsic credit profile as being weaker than its support-driven rating due to its small franchise and weaker financial profile relative to similarly rated peers.