Fitch affirms Abans at ‘AA-(lka)’/Stable; rates proposed debentures ‘AA-(lka)’

Fitch Ratings has affirmed Sri Lanka- based Abans PLC’s National Long-Term Rating at ‘AA-(lka)’ with a Stable Outlook. At the same time, Fitch has assigned a ‘AA-(lka)’ National Long-Term Rating to Abans’ proposed senior unsecured redeemable debentures of Rs1 billion, with the option to increase up to Rs 2 billion.

The proposed debentures are rated in line with Abans’ existing unsecured notes, as they rank equally, and because there is limited subordination risk to unsecured noteholders from secured- and prior-ranking debt. The proceeds from the debentures will be used to refinance the company’s existing debt. Abans’ rating reflects its strong domestic market share in consumer electronics, supported by an extensive distribution network and established brands, along with its adequate financial profile. Fitch expects a gradual recovery in demand for consumer durables amid a slow rebound in Sri Lanka’s economic activity, which should mitigate profitability pressure from increased competition as imports resume.

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