Sat, 03 Dec 2022 Today's Paper

Sri Lanka raises US $2.4bn in dollar bond sale

8 March 2019 11:51 am - 0     - {{hitsCtrl.values.hits}}

A A A

Sri Lanka sold $2.4 billion in five-year and 10-year U.S. dollar-denominated bonds on Friday, according to a term sheet seen by Reuters, successfully tapping the international markets at a time the country is facing strains on its finances. 

Sri Lanka sold $1 billion in five-year bonds with a coupon of 6.85 percent and $1.4 billion in 10-year bonds with a coupon of 7.85 percent, shaving 35 basis points (bps) off the initial indicative coupons.

A senior central bank official told Reuters that the appetite was "better than expected".

"It is more than 500 basis points above the U.S. Treasury, which is high but given the political crisis and other uncertainties we faced with in the past few months, these are better rates compared to what we thought initially," said the central bank official.

The five-year bond attracted over $2.7 billion in orders and 10-year attracted over $4.8 billion in orders, the term sheet showed.

U.S. investors picked up most of the bonds, accounting for 39 percent of buyers on the five-year bonds and 44 percent on the 10-year ones, according to the term sheet.

European investors followed with 38 percent and 39 percent, respectively, while Asian investors accounted for 23 percent on the five-year bonds and 17 percent on the 10-year bonds.

Standard & Poor's and Fitch said they had assigned "B" ratings to the bonds, while Moody's rated them "B2".

Last month, Sri Lanka raised its borrowing limit for dollar-denominated bonds to $3 billion, three sources said.

The sale of five-year and 10-year bonds comes as the South Asian island nation is struggling to repay foreign loans, with a record $5.9 billion due this year, including $2.6 billion in the first quarter.

Sri Lanka used its reserves to repay a $1 billion sovereign bond loan in January and the International Monetary Fund (IMF) last week agreed to extend a $1.5 billion loan facility for an extra year.

The bond sale was launched two days after the government presented its budget for 2019 and not long after the end of a 51-day political crisis that caused a sharp fall for the rupee currency.

The proposed budget boosted spending on state employees, pensioners and the armed forces, and promised many rural infrastructure projects to woo voters before two elections.

Proceeds from the bond sale will be used "for expenditure sanctioned by the Parliament of Sri Lanka for 2019", the term sheet said. 

All three major rating agencies downgraded Sri Lanka's debt after President Maithripala Sirisena sacked his prime minister in October and replaced him with pro-China former president Mahinda Rajapaksa, though that decision was later reversed.

Sri Lanka's five-year government bond yields were at 10.85 percent on Thursday, below an 18-month high of 12.30 percent during the political crisis. 

BOC International, Citigroup, Deutsche Bank, HSBC, JPMorgan, SMBC Nikko and Standard Chartered Bank are joint bookrunners for the bond sale. 


Order Gifts to Sri Lanka. See Kapruka's top selling online shopping categories such as Toys, Vegetables, Grocery, Flowers, Birthday Cakes, Fruits, Chocolates, Clothing and Electronics. Also see Kapruka's unique online services such as Sending Money,Online Books, Delivery Service, Food Delivery and over 700 top brands. Also get products from Amazon & Ebay via Kapruka Gloabal Shop Sri Lanka

  Comments - 0

Order Gifts to Sri Lanka. See Kapruka's top selling online shopping categories such as Toys, Vegetables, Grocery, Flowers, Birthday Cakes, Fruits, Chocolates, Clothing and Electronics. Also see Kapruka's unique online services such as Sending Money,Online Books, Delivery Service, Food Delivery and over 700 top brands. Also get products from Amazon & Ebay via Kapruka Gloabal Shop Sri Lanka

Add comment

Comments will be edited (grammar, spelling and slang) and authorized at the discretion of Daily Mirror online. The website also has the right not to publish selected comments.

Reply To:

Name - Reply Comment




Order Gifts to Sri Lanka. See Kapruka's top selling online shopping categories such as Toys, Vegetables, Grocery, Flowers, Birthday Cakes, Fruits, Chocolates, Clothing and Electronics. Also see Kapruka's unique online services such as Sending Money,Online Books, Delivery Service, Food Delivery and over 700 top brands. Also get products from Amazon & Ebay via Kapruka Gloabal Shop Sri Lanka

She said/He said

Much has been written and said in the last few days since the news was releas

POLICE ON TRIAL: Exercising Authority without Accountability

Although armed with the power of the State and empowered to use force against

Downfall and death of LTTE’s Mahathaya

The Liberation Tigers of Tamil Eelam (LTTE) ceased to exist as a functioning

Rishi Sunak; why SL did not have a Tamil or Muslim as President?

Britain now has a British Asian, Hindu Prime Minister, though Rishi Sunak is