The Central Bank said on Wednesday that Sri Lanka had launched and priced a US$ 1.0 billion 10-year global bond offering. The transaction priced at a fixed-rate yield of 6.25 per cent, equivalent to a spread of +332.2 bps over the 10-year U.S. Treasury.
This transaction represents the fourth U.S. Dollar benchmark offering in the global bond markets by Sri Lanka since 2007. Bank of America Merrill Lynch, Barclays Capital, HSBC and the Royal Bank of Scotland acted as joint bookrunners and joint lead managers on the transaction. Bank of Ceylon acted as the co-manager on the transaction.
Prior to launch of the transaction, Sri Lanka conducted a series of fixed income investor update meetings with investors in Singapore, Hong Kong, various cities in the USA and London. During the roadshow, Sri Lanka achieved a credit ratings upgrade by Fitch to BB-, and both the Moody’s and S&P ratings were improved to positive outlook.
With a positive backdrop from the rating agencies, strong support from investors and a positive window of execution in the market, Sri Lanka announced its USD transaction during the Asia morning on July 20. The final orderbooks stood at US$7.5 billion, an oversubscription ratio of 7.5 times, with orders from 315 accounts.
Central Bank governor Ajith Nivard Cabraal said: “We are very pleased with the strong response to this transaction, in volatile market conditions, which reflects high levels of investor confidence in Sri Lanka’s economy and the robust growth prospects for the country.”
