Fitch maintains Ceylease’s ‘BB+’ on RWP

Friday, 5 July 2013 00:00 - - {{hitsCtrl.values.hits}}

Fitch Ratings Lanka is maintaining Ceylease Ltd.’s (CL) National Long-Term rating ‘BB+(lka)’on Rating Watch Positive (RWP). CL was placed on RWP in January 2013 following Merchant Bank of Sri Lanka Plc’s (MBSL) announcement in December 2012 that the Board of Directors of MBSL has approved a merger between, CL and with MCSL Financial Services Limited’s (MFSL; BBB(lka)/Stable). CL’s rating reflects its association with its main shareholder Bank of Ceylon (BOC) (AA+(lka)/Stable) in terms of its shareholding of 55% in CL, and its representation on the latter’s board. The RWP reflects the likelihood of CL’s rating being upgraded to align with MFSL’s rating upon the conclusion of the merger. This is because BOC is likely to maintain a dominant effective shareholding in the merged entity and also because Fitch expects continued support for the merged entity. The Rating Watch will be resolved based on the successful execution of the merger. CL’s total assets amounted to Rs. 1.6 b at end-December 2012. The company operates via two outlets.

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