Governor pleased
Central Bank Governor Ajith Nivard Cabraal said they are extremely pleased with the outcome of the sovereign bond issue of US $ one billion. “This demonstrates that the country has been well recognized among the global investors.” “Sri Lanka is now an emerging star in the global financial landscape,” the Governor said. (CdeS)
Investor demand exceeds over USD 6 billion:
(September 29, Colombo, Sri Lanka Guardian) Sri Lanka finalized a USD 1 billion 10 year Sovereign Bond issue with a coupon rate of 6.25 percent on Monday.
This was the third international sovereign bond offering, following issues in 2007 and 2009. The offering attracted an order book that exceeded USD 6.3 billion within 14 hours of opening on September 27 2010, thereby being over-subscribed by more than six times. This clearly underscores the high global investor confidence based on the recent progress and the future prospects in Sri Lankan economy since the end of the conflict in the country, the Central Bank said yesterday.
Orders were received from 362 investors globally. By geographic distribution, 52.5 percent of the bonds were allocated to investors in the United States, 25 percent to investors in Europe and 22.5 percent to investors in Asia.
By investor type, 85 percent of the bonds were allocated to Fund and Asset Managers and the balance to Pension Funds, Insurance companies and banks.
The Offering is of 144A / Reg.S format and the bonds will mature in October 2020.
The bonds are rated B+ by two international rating agencies, Standard and Poor’s and Fitch Ratings and will be listed on the Singapore Exchange.
The current coupon rate of 6.25 percent for the ten year sovereign bond is significantly lower than the cost of borrowings as compared to previous two international offerings in 2009 and 2007.
The Government will use the proceeds from the bond issue to finance its current infrastructure and to restructure a part of the existing debt stock of the government to improve overall public debt management. Bank of America Merrill Lynch, Royal Bank of Scotland and Hong Kong and Shanghai Banking Corporation functioned as Joint Lead Managers and Joint Book Runners of the offering, while Bank of Ceylon participated as Co-Manager.
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