The 5-year bonds will be listed on the Colombo Stock Exchange.
"The company plans to use the proceeds to further strengthen its Tier 2 capital base and to maintain capital adequacy compliance," Fitch said in a statement.
"The proposed debentures are rated two notches below PLC's National Long-Term Rating.
"This reflects our baseline notching for loss severity for this debt class and our expectation of poor recoveries in the event of default."
The full statement is reproduced below:
Fitch Assigns People's Leasing's Proposed Subordinated Debt Final 'BBB+(lka)'
Fitch Ratings - Singapore/Colombo - 07 Sep 2026: Fitch Ratings has assigned Sri Lanka-based People's Leasing & Finance PLC's (PLC, A(lka)/Stable) proposed Sri Lankan rupee-denominated subordinated listed debenture issue of up to LKR10 billion a final National Long-Term Rating of 'BBB+(lka)'.
Key Rating Drivers
The proposed debentures will mature in five years and will be listed on the Colombo Stock Exchange. The company plans to use the proceeds to further strengthen its Tier 2 capital base and to maintain capital adequacy compliance.
The proposed debentures are rated two notches below PLC's National Long-Term Rating. This reflects our baseline notching for loss severity for this debt class and our expectation of poor recoveries in the event of default.
We applied our Bank Rating Criteria to rate the proposed debentures, as we believe the prudential capital framework of Sri Lankan finance companies is close to that for banks. There is no additional notching for non-performance risk, as the proposed debentures do not contain going-concern loss-absorption features.
The final rating is the same as the expected rating assigned on 8 May 2026 and follows the receipt of documents conforming to information already received.
PLC's National Long-Term Rating was upgraded to 'A(lka)' from 'A-(lka)' on 24 January 2025 following the upgrade of its parent, People's Bank (Sri Lanka) (PB), to 'AA-(lka)' from 'A(lka)'.
PLC's rating reflects Fitch's expectation of extraordinary support from PB, if needed, based on the parent's majority shareholding, PLC's synergistic role and shared branding, offset by the subsidiary's significant size relative to PB.
Please refer to our commentary, Fitch Upgrades 10 Sri Lankan NBFIs' Ratings, Affirms 8 Following National Scale Recalibration, published 24 January 2025, for details on PLC's key rating drivers and sensitivities.
RATING SENSITIVITIES
Factors that Could, Individually or Collectively, Lead to Negative Rating Action/Downgrade
A downgrade of PLC's National Long-Term Rating would lead to a downgrade of the subordinated debt rating.
Factors that Could, Individually or Collectively, Lead to Positive Rating Action/Upgrade
An upgrade of PLC's National Long-Term Rating would lead to an upgrade of the subordinated debt rating.
REFERENCES FOR SUBSTANTIALLY MATERIAL SOURCE CITED AS KEY DRIVER OF RATING
The principal sources of information used in the analysis are described in the Applicable Criteria.
Public Ratings with Credit Linkage to other ratings
PLC's rating is linked to PB's National Long-Term Rating.