Fitch rates People’s Leasing debentures AA-(lka)

Fitch Ratings said it assigned an expected national long-term rating of AA-(lka) to People's Leasing & Finance plc's proposed senior debenture issue of up to 8 billion in Sri Lankan rupee.

The debentures, which will have tenors of three-, four- and five-years and carry fixed coupons, will be listed on the Colombo Stock Exchange, Fitch said.

The proceeds will be used for working capital purposes and to reduce maturity mismatches, the agency said.

The rating on the issue is in line with the company’s national long-term rating of AA-(lka) as the issue is expected to rank equally with claims of the company's other senior unsecured creditors, Fitch said.

The company also has a long-term foreign-currency issuer default rating of B, long-term local-currency issuer default rating at B and a national long-term rating on its senior unsecured debt of AA-(lka).

The ratings reflect an opinion that the company’s parent, the state-owned and systemically important People's Bank (Sri Lanka) will provide extraordinary support to People’s Leasing if required, the agency said.

People's Bank's propensity to support People’s Leasing stems from its 75% shareholding, common brand name and People’s Leasing’s position as the bank's strategic subsidiary, Fitch said.

But the parent's ability to provide support to People’s Leasing is as reflected in Sri Lanka's rating of B+, the agency added.

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