People’s Bank Rs.20bn debenture issue oversubscribed

• Largest-ever Basel III, Tier 2-compliant, subordinated debenture ever concluded up to now
• Aimed at strengthening bank’s Tier 2 capital and expand its loan book
• People’s Bank accounts for 16% of banking industry’s assets and deposits

People’s Bank’s Basel III, Tier 2-compliant, unlisted, rated, unsecured, subordinated, redeemable debenture issue was oversubscribed, receiving in excess of Rs.20 billion worth of bids during the early hours of the opening day itself, in a strong expression of investor confidence. 

The debenture issue was in three tranches—100 million, five, eight and ten-year subordinated debentures, followed by two other equal tranches of 50 million similar debentures, at Rs.100 each, in the event of an oversubscription of the preceding tranches.  Incidentally, this was the largest-ever Basel III, Tier 2-compliant, subordinated debenture issue ever concluded in Sri Lanka up to now. 

The objective of the issue was to strengthen the Tier 2 capital of the bank and to expand its loan book via diverse lending products in the ordinary course of business, over a period of three to six months, based on the current credit demand.    

People’s Bank accounts for 16 percent of the banking industry’s assets and deposits and is thereby the second largest bank in the country.  As a fully state-owned, domestic systemically important bank, People’s Bank’s role extends beyond that of mere financial intermediation and its impact on the economic and social fabric of Sri Lanka is unmatched. The bank is rated AA+ (lka) by Fitch Ratings Lanka Ltd. 

People’s Bank has many significant achievements in the fundraising arena, both in domestic and foreign markets.

The bank has raised Rs.30 billion locally by issuing unlisted debentures 
up to now. Furthermore, the bank managed to secure a US $ 200 million bilateral, eight-year facility in 2019, which was one of the largest and longest tenor US dollar facilities ever secured by a Sri Lankan commercial bank.      

People’s Bank Investment Banking Unit, which is one of the leading investment banks in Sri Lanka, acted as the manager to the issue whilst the bank’s Legal Department acted as the legal advisor
to the issue.