NDB Securities (Pvt) Ltd,

5
th
Floor,
# 40, NDB Building,
Nawam Mawatha,
Colombo 02.
Tel: +94 11 2131000
Fax: +9411 2314180
Research Team Sidath Kalyanaratne, Akila Devendra, Vaishalie Shakespeare
F
i
x
e
d

I
n
c
o
m
e

LKR Mn FY10 FY11 FY12 FY13 FY14
Gross Income 8,058 10,662 16,136 20,814 24,177
Net profit for the year 1,152 2,612
2,887 3,110 3,463
Loans and advances 26,739 52,284
83,935 88,298 90,342
Core capital adequacy ratio (%) - 14.81 25.50 21.15 19.12
Total capital adequacy ratio (%) - 14.81 25.50 20.06 18.05
Assets Ratio (%) 3.95 5.38 5.61 3.11 3.15
Liquid Assets Ratio (%) 0.82 0.71 0.58 0.85 0.88
Nonperforming loans ratio (%) - 1.33 0.65 1.44 2.18


Date 11.09.2014
Security Details
Issuer Peoples Leasing &
Finance (PLC)
Instrument Senior, Unsecured,
Redeemable
Tenure
Type A 3 Years
Type B 4 Years
Issue size

LKR 1,500,000,000
(15,000,000)
extendable to
LKR 3,000,000,000
(30,000,000)
Rating AA- (lka) by Fitch
Coupon
Type A 8.75% (Annually)
Type B 9.625% (Annually)
Annual Equivalent Rate (AER)
Type A 8.75%
Type B 9.625%
Minimum
Investment
LKR 10,000
Issue opening date :15
th
Sep 2014
Issue closing date : 2
nd
Oct 2014























Peoples Leasing & Finance (PLC)
Debenture Issue

Objectives of the issue The proceeds will be utilized
for working capital purposes of the company as well as to
minimize interest rate risk and gap exposure in the banks
asset/liability portfolios. In addition, it will be used to
raise medium term funds to match the medium to long
term lending of PLC and to lessen the mismatch in
funding exposure.
Ratings outlook Fitch Rating Lanka Limited has rated
the issue at AA- (lka) up to LKR 3 Bn. The issue is rated
at the same level as PLCs long term rating as they
constitute the unsecured and unsubordinated obligations
of the company.
The rating maybe affected adversely if Peoples Bank no
longer has majority stake in the company or if Peoples
Banks ability to support the company weakens or if the
strategic importance of PLC to Peoples Bank reduces
over time.
Exemption from income tax As per current tax
legislation, interest income earned on debentures listed
after 1st January 2013 is exempted from withholding tax
and income tax.
Conclusion The debenture offers a similar premium to
prevalent treasury bond yields in comparison to
debentures with similar tenures issued in the recent past.
Therefore, it can be recommended for investors seeking
to diversify their portfolios into fixed income instruments.
However, the investor should consider the secondary
market liquidity risk and allocate funds which would be
held until the maturity of the instrument.



NDB Securities (Pvt) Ltd Peoples Leasing & Finance 11
th
September 2014 2


Annexure
Benefits of the instrument
Listed debentures are exempt from any income tax or withholding tax. Therefore, the net return to the
investor from a listed debenture would be equal to a taxable fixed income instrument (E.g. Fixed
Deposits) offering a higher return.
For example, individuals are liable to 2.5% - 8.0% withholding taxes on fixed deposits while
companies are liable to 28% in income taxes on interest income. Therefore, for this instrument
comparable returns for a fixed deposit will be as follows.

Comparable Listed Debentures
We have taken debentures issued recently with similar risk ratings and tenures for comparison with
PLC debenture issue.

Terms and Descriptions
Term Description
Senior The claims of the debenture holders shall in the event of winding up of the company
rank in priority to the subordinated creditors of the company but after the secured
creditors of the company and preferential claims as well as rank in priority to, and
over the claims and right of the shareholders of the Company.
Unsecured

Redeemable
Repayment of the principal sum and payment of interest on the debentures are not
secured by a charge on any asset of the company.
Recoverable upon the fulfillment of certain requirements by means of converting to
money or equivalent.

Please refer to prospectus for more details.

Type A Type B
2.5% 8.97% 9.87%
8.0% 9.51% 10.46%
28.0% 12.15% 13.37%
Applicable tax rate
Comparable rate of a taxable instrument (such as a fixed deposit)
Comparable Listed Debentures
Company PLC DFCC* HNB**
Rating AA- (lka) Fitch AA- (lka) Fitch AA- (lka) Fitch
Premium over T-Bond 1.85% - 2.365% 1.85% 2.33%
Spread as a % over T-Bond 26.81-32.58% 27.82% 19.50%
Tenure 3 - 4 Years 3 Years 10 Years
Issue Size LKR 1,500,000,000 LKR 3,000,000,000 LKR 1,354,300,000
*Issued in Aug 2014
**Issued in Aug 2013

NDB Securities (Pvt) Ltd Peoples Leasing & Finance 11
th
September 2014 3


Mrs. Prasansani Mendis Chief Executive Officer prasansini@ndbs.lk 011 2131005
Sales Branches
Head Office CSE
Mr. Gihan R. Cooray gihan@ndbs.lk 011 2131010 Mr. Sujeewa Athukorala sujeewa@ndbs.lk 011 3135495
Mr. Jayantha Samarasinghe jayantha@ndbs.lk 011 2131011 Mrs. Shiromi De Silva shiromi@ndbs.lk 011 2335054
Mr. Aroos Faleel aroosfaleel@ndbs.lk 011 2131012 Kiribathgoda
Mr. Uditha Silva uditha@ndbs.lk 011 2131016 Mr. Gayan Pathirana gayan@ndbs.lk 011 2907515
Mr. Taamara De Silva taamara@ndbs.lk 011 2131018 Galle
Mr. Imran Reyal imran@ndbs.lk 012 2131021 Mr. Upul Hettiarachchi upul@ndbs.lk 091 2225447
Mr. Ramesh Anthony ramesh@ndbs.lk 011 2131023 Kaluthara
Mr. Nimal Kumara kumara@ndbs.lk 011 2131022 Mr. Ranganath Wijethunge ranganath@ndbs.lk 034 2221589
Mr. Sanjaya Prabath sanjaya@ndbs.lk 011 2131024 Mr. A A Jeewantha jeewantha@ndbs.lk 034 2221589
Mr. Akram Thadani akram@ndbs.lk 011 2131025 Jaffna
Mr. Ishanka Fernando ishanka@ndbs.lk 011 2131054 Mr. C Padmanathan chandru@ndbs.lk 021 2224978
Mr. Harsha Sritharan harsha@ndbs.lk 011 2131017 Mr. S. Vibushan
vibusha.@ndbs.lk 021 5671155
Mr. Sajed Sallay sajed@ndbs.lk 011 2131019 Ampara
Mr. Stefan De Alwis stefan@ndbs.lk 011 2131015 Mr. Ravi De Mel ravi@ndbs.lk 063 2224245
Mr. S. Wellappuliarachchi shakya@ndbs.lk 011 2131073
Operations
Contact Us mail@ndbs.lk 011 2131000
NDB Securities (Pvt) Ltd
5th Floor, NDB Building,
40, Nawam Mawatha, Colombo 02
NDB Securities (Pvt) Ltd

NDB Securities (Pvt) Ltd Peoples Leasing & Finance 11
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September 2014 4
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