Citi achieved yet another milestone on 11th July by partnering with the Central Bank of Sri Lanka on behalf of the Sri Lankan Government to successfully raise US $ 1.5 billion in a dual-tranche 5.5- and 10-year bond offering.
The Notes were priced at a coupon and re-offer yield of 5.750 percent and 6.825 percent for the 5.5-year and 10-year tranche, respectively. Both the 5.5-year and 10-year tranche were priced well inside the respective initial price guidance of 6.125 percent area and 7.125 percent area.
Driven by high quality institutional accounts globally, both the 5.5-year and 10-year tranche attracted orders from over 200 accounts. The 5.5-year tranche saw allocations of 35 percent to the U.S., 37 percent to Europe, and the remaining 28 percent to Asia. By investor type, the split was 85 percent to fund managers, 8 percent to insurance and pension funds, 3 percent to banks, and 4 percent to private banks. The 10-year tranche saw allocations of 62 percent to the U.S., 28 percent to Europe, and the remaining 10 percent to Asia. By investor type, the split was 91 percent to fund managers, 7 percent to insurance and pension funds, 2 percent to banks and private banks.
The bonds have been rated ‘B1’, ‘B+’ and ‘B+’ by Moody’s Investors Service Standard and Poor’s and Fitch Ratings respectively. This marks the Republic’s tenth U.S. dollar benchmark offering in the international bond markets since 2007.
Citi Country Officer for Sri Lanka Ravin Basnayake said: “Citi is honoured to have once again partnered with the Government of Sri Lanka in this successful transaction. The global investor support for this transaction underlines the strong confidence investors have in Sri Lanka’s credit story. We are proud to have yet again supported the country in creating this new benchmark in the international capital markets”.
This landmark transaction represents the country’s return to the U.S. dollar bond markets and Citi acted as Joint Lead Manager, Joint Bookrunner and Ratings advisor reflecting Citi’s global capabilities, dominant market position and global network presence.
Citi Markets Head, Saneth Gamage commenting on the deal said, “Given the current market conditions prevailing in the global markets the investor appetite towards this issuance was commendable. The order book saw overwhelming support globally with one of the biggest orderbooks we have seen for the Republic within recent years – US$2.5bn and US$3.0 bn respectively for the individual tranches and more than 400 investors in total”.