Fitch Ratings Lanka Limited

Fitch Ratings-Colombo/Mumbai/Singapore-08 June 2012: Fitch Ratings Lanka has assigned Sampath Leasing and Factoring Ltd’s (SLFL) proposed senior unsecured redeemable debentures of up to LKR500m a ‘A(lka)’ National Long-Term rating.

The issue has been rated at the same level as SLFL’s National Long-Term rating of ‘A(lka)’ – which has a Positive Outlook, in line with Fitch’s criteria for rating senior unsecured debt of financial institutions.

The rating reflects the implied support assumed from SLFL’s main shareholder – Sampath Bank PLC (SB, ‘AA-(lka)’/Positive, 100% ownership), given the strong strategic and operational linkages between the two entities.

The issue offers semi-annual, fixed-rate interest payments, which help SLFL mitigate its interest rate risk and equal bullet principal repayments in the third and fourth year. The issue proceeds will be utilised to fund SLFL’s lease and hire purchase portfolio.

At 31 December 2011, SLFL’s asset base stood at LKR4.1bn, which amounted to a 2% share of SB’s group assets, while SLFL’s share of SB’s group post-tax profits amounted to 5%.

For a detailed credit profile, please refer the full rating report on SLFL dated 25 April 2012.

Note; Fitch’s National ratings provide a relative measure of creditworthiness for rated entities in countries with relatively low international sovereign ratings and where there is demand for such ratings. The best risk within a country is rated ‘AAA’ and other credits are rated only relative to this risk. National ratings are designed for use mainly by local investors in local markets and are signified by the addition of an identifier for the country concerned, such as ‘AAA(lka)’ for National ratings in Sri Lanka. Specific letter grades are not therefore internationally comparable.

Additional information is available at www.fitchratings.com. The ratings above were solicited by, or on behalf of, the issuer, and therefore, Fitch has been compensated for the provision of the ratings.

Sampath Bank PLC owns 1.78% of Fitch Ratings Lanka Ltd (FRL). No shareholder other than Fitch Ratings Limited of the U.K. is involved in the operations of, or credit rating reviews conducted by, FRL.

Applicable criteria, ‘Global Financial Institutions Rating Criteria’, dated 16 August 2011, ‘Finance and Leasing Companies Criteria’, dated 12 December 2011, ‘Rating Linkages in Nonbank Financial Subsidiary Relationships’, dated 29 November 2011 and ‘National Ratings Criteria’, dated 19 January 2011, are available at www.fitchratings.com.