Paper Issue

Feb 01, 2008 (LBO) – Lanka Orix Leasing Company (LOLC) is planning to raise 500 million rupees from a rated commercial paper, Fitch Sri Lanka said, assigning the issue a short term rating of 'F1 (lka)'. . "The assigned rating reflects the absence of an adverse shift in the maturities of the company's interest bearing assets and liabilities, as well as its good access to borrowings from local banks," Fitch Ratings said.

A National Short-term rating of 'F1(lka)' indicates the strongest capacity for timely payment of short term financial commitments relative to other issuers or issues in the same country, the rating agency said.

Where the credit risk is particularly strong, a "+" is added to the assigned rating within the 'F1' category.

Fitch said LOLC had committed but undrawn funding lines of 620 million rupees as at January 24, 2008 which was 1.24 times the principal of the proposed issuance.

"However, the Short-term rating on the notes is constrained by LOLC's inability, as a non-bank financial institution, to access the liquidity window of the Central Bank of Sri Lanka," Fitch said.

"The rating on the notes is also credit linked to LOLC's National Long-term rating of 'A(lka)'