Record 321 investors for US $ 1 b bond issue
Ravi LADDUWAHETTY
A record 321 investors from the United States, Europe and Asia have
vied for the just concluded US $ 1 billion Sovereign Bond issue,
oversubscribed by 7.28 times personifying the confidence of
international investors on the growth prospects and vibrant performance
of the Sri Lankan economy.
The issue was so successful that there were 321 institutional and
individual investors who were enthusiastic and upbeat about the economy
that they subscribed 7.28 times of the issue raising US$ 7.28 billion
and there was even a high net worth individual who wanted to subscribe
to the entire issue single handedly, Central Bank’s Senior Deputy
Governor Dharma Dheerasinghe, who was also in the visiting team, told
Daily News Business yesterday. He said the apportionment of the bond has
been 43 percent among the US investors, 30 percent among European
investors and 27 percent among Asian investors.
The ten member team led by Central Bank Governor Ajit Nivard Cabraal
and comprising Central Bank and Treasury officials participated in road
shows in Singapore, Hong Kong, Los Angeles, Boston, New York and London
and the investor sentiments were reflected in the numbers by which the
issue was oversubscribed.
The Senior Deputy Governor also said the interest rates offered this
time was also more attractive than 2010, despite the same value of the
sovereign bond issue at US $ 1 billion and at the same rate of 6.25
percent. Explaining this, he said the interest rate of 6.25 percent in
fact was spread over and above the ten year US Treasury Bond rate this
year was 3.34 percent against the 3.37 percent last year and as such the
spread this year is tighter by 39 basis points. He also said the
advantage accruing to Sri Lanka is in the backdrop of rising world
interest rates. Sri Lanka has been issued with an international bond
this year at interest rates tighter than 39 basis points, which has been
buttressed by Sri Lanka’s credit story as projected by the three ratings
agencies- Fitch, Moody and Standard and Poor.
A strong fiscal consolidation process is underway and the targeted
budget deficit was at 6.8 percent.
Sri Lanka’s banking system has also been resilient with an improved
performance in the macro-prudential indicators such as the Capital
Adequacy Ratios and the Non Performing Asset Ratios. |