Fitch Ratings has assigned an expected National Long-Term Rating of BBB+(lka)(EXP) to People’s Leasing & Finance PLC’s proposed rupee-denominated subordinated listed debenture issue of up to Rs.10 billion, EconomyNext reported.
The five-year subordinated debentures will be listed on the Colombo Stock Exchange. Proceeds will go toward strengthening the lender’s Tier 2 capital base and supporting loan growth.
The expected rating is two notches below People’s Leasing’s National Long-Term Rating of A(lka)/Stable. Fitch said the notching reflects the heightened loss-severity expected on subordinated debt in a default scenario, with no additional notching applied for non-performance risk because the instruments do not carry going-concern loss-absorption features.
Fitch said it applied its Bank Rating Criteria to the assessment because Sri Lankan finance companies operate under prudential frameworks that mirror banks. People’s Leasing’s parent, state-owned People’s Bank, is rated AA-(lka).
The new instrument is distinct from the Rs.10 billion private placement of Tier 2 debentures the lender raised earlier this year from institutional investors. That issue was placed privately; Friday’s announcement covers a retail-accessible, CSE-listed offering.
Fitch’s expected rating will be confirmed once final issue terms are set. People’s Leasing is the largest of Sri Lanka’s licensed finance companies by asset base.
