CF's ratings factor in its strong franchise and capitalisation, supported by robust profitability and its 55-year operating history. CF is one of the largest licensed finance companies (LFCs) holding 13% of the sector's assets as at end-2011.
Rating Sensitivities
An upgrade of CF's rating is contingent upon greater product and funding diversity together with increased funding flexibility commensurate with higher category peers. Conversely, a sustained weakening in capitalisation due to deterioration in asset quality impacting profitability could result in a downgrade.
Established in 1957, CF is 21.9% held by the Wijenaike family - the founders of the company. Corporate Service Pvt Ltd holds a further 16.11% and the remainder is publicly held.
The debentures have been given an expected rating of 'A+(lka)(EXP)' pending final documentation.
Fitch said the money will be used to finance lending and also maturity mismatches.
The full statement is repro