Fitch puts Ceylease on evolving watch

Fitch Ratings Lanka said it placed Ceylease Financial Services Ltd.'s national long-term BB+(lka) rating on Rating Watch evolving.

The rating action follows Merchant Bank of Sri Lanka plc's announcement on May 4 that the Central Bank of Sri Lanka has provided in-principle approval for the issue of a specialized banking license to Merchant Bank of Sri Lanka, the agency said.

The license is subject to a merger between Ceylease Financial, Merchant Bank of Sri, Merchant Credit of Sri Lanka Ltd. and MBSL Savings Bank Ltd.

The rating watch reflects uncertainty regarding the modalities and resolution of the intended merger, the expectation of Bank of Ceylon's support to, and the credit profile of, the merged entity, the agency added.

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