Singer Debentures Rated 'A-(lka)(EXP)'

Fitch Ratings has assigned Singer Sri Lanka's proposed senior unsecured redeemable debenture issue of up to Rs1.5 b an expected National Long-Term Rating of 'A-(lka)(EXP)'.

The debentures are rated at the same level as Singer's National Long-Term Rating of 'A-(lka)' because they represent senior unsecured obligations of the company and would rank equally with the company's other senior unsecured debt.

The final rating is contingent on the receipt of final transaction documents conforming to information already received. The debenture is to be issued at a fixed rate with a tenor of three years. Singer plans to use the proceeds from the issue to refinance the US$ 10m loan falling due in July 2014, and minimise its exposure to short-term floating rate funding.

Singer managed to contain overdue accounts to 3.7% of the portfolio at end-2013 (2012: 2.3%), supported by average durations of less than a year and strong staff incentives for debt recovery, while write-offs were negligible. 

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