Rs. 10 b debenture issue of People’s Leasing and Finance now open

People’s Leasing and Finance’s (PLC) Rs. 10 billion listed debenture issue is now up for subscription, although its official opening is on 29 July. 

The issue involves 40 million unsecured listed redeemable, rated three-year and five-year debentures at Rs. 100 each with an option to raise a further 60 million debentures in the event of an oversubscription of the original amount.   

PLC said the debentures were of four types and rated A+ by Fitch Ratings Lanka Ltd.

Type A has a fixed coupon rate of 8% per annum payable annually, Type B zero coupon debentures priced at Rs. 79.38 with an Annual Effective Rate of 8% per annum calculated on the basis of annual compounding on the issue price payable on the date of redemption. Type C is a fixed coupon rate of 9% per annum payable annually and Type D is zero coupon debentures priced at Rs. 64.99 with AER of 9% per annum calculated on the basis of annual compounding on the issue price payable on the date of redemption. 

The funds raised through the Debenture Issue will be utilised to expand the lending portfolio of PLC within six months from the Date of Allotment. The company anticipates a strong demand for lending products such as auto leases and term loans and will utilise the debenture proceeds by focusing on the expansion of lease and loan portfolio. 

Joint managers to the issue are Capital Alliance Partners Ltd. and People’s Bank Investment Banking Unit. PLC’s loans and advances and lease disbursements in FT21 were Rs. 50.8 billion, down from Rs. 70.7 billion in FY20 and Rs. 95.3 billion in FY19 The debenture issue was first announced in June aimed at raising Rs. 8 billion and was subsequently upsized to Rs. 10 billion.

PLC last had a debenture issue worth Rs. 6 billion in early 2018 offering four-year fixed rate debenture at 12.40% payable annually and five-year fixed rate debentures at 12.8% payable annually. The issue was oversubscribed with 52 applications worth Rs. 6.67 billion received.