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USD500 m sovereign bond:
Offering successfully priced
Last week the Democratic Socialist Republic of Sri Lanka priced a
USD500 million five-year sovereign bond issue (the "Offering"), with a
coupon of 7.40 percent. This represents Sri Lanka's first international
offering following the end of the internal conflict.
The Government will use the net proceeds from the Offering to
supplement available concessional funds to develop infrastructure
projects that have previously been approved by the Government and
included in the current 2009 Budget.
Central Bank of Sri Lanka Governor Ajith Nivard Cabraal said: "We are
very pleased with the outcome of our latest sovereign US Dollar bond
issue. The strong response signifies the heightened confidence of
investors globally in Sri Lanka and the country's enhanced growth
prospects following the end of the conflict. This transaction broadens
our international investor base substantially and enhances Sri Lanka's
financial flexibility for the future."
The Offering attracted an orderbook that was over-subscribed by more
than thirteen times one of the highest level of over-subscription of any
sovereign US Dollar bond offering during 2009 year-to-date.
Orders were received from two hundred and sixty-nine investors. By
geography, 45 percent of the bonds allocated to investors in the United
States, 31 percent to Europe and 24 percent to Asia. By investor type,
78 percent of the bonds were allocated to Fund Managers, 8 percent to
Banks, 7 percent to Retail, 4 percent to Insurance Companies and Pension
Funds and 3 percent to other investors.
The Offering is in 144A / Reg.S format and the bonds mature on
January 22, 2015.
The bonds are rated B by Standard & Poor's and B+ by Fitch Ratings
and will be listed on the Singapore Exchange.
The coupon of 7.40 percent is significantly lower than the coupon of
8.25 percent on Sri Lanka's inaugural USD bonds issued in October 2007.
HSBC, J.P. Morgan and The Royal Bank of Scotland acted as joint lead
managers and joint bookrunners on the Offering. |
