Fitch rates People’s Leasing’s proposed commercial paper at ‘F1(lka)’

Fitch Ratings Lanka has assigned People's Leasing Company Plc’s (PLC, ‘A+(lka)'/Stable) proposed commercial paper issue of up to Rs.1billion an ‘F1(lka)’ National Short-term rating.

The proposed issuance will be utilised to finance PLC's working capital / lending. Of the proposed Rs1billion, Rs750 million is expected to have tenure of one year, while a further Rs100 million and Rs150million will have tenures of three- and six months respectively. PLC’s ratings reflect Fitch’s view that its parent, People’s Bank (PB, ‘AA(lka)’/Stable) is likely to extend support in a stressed scenario, if required. This view is underpinned by PB’s majority ownership of PLC (December 31, 2011: 71.5%), common board representation, PLC group’s significant profit contribution to PB's consolidated profile (end-September 2011: 36% of PB group profits), and the strong strategic and operational linkages between the companies.