Sri Lanka Equity Forum
Dear Reader,

Registration with the Sri Lanka Equity Forum would enable you to enjoy an array of other services such as Member Rankings, User Groups, Own Posts & Profile, Exclusive Research, Live Chat Box etc..

All information contained in this forum is subject to Disclaimer Notice published.


Thank You
Sri Lanka Equity Forum

Discussion Forum for Stock Market Investors in Sri Lanka

සිංහල පරිවර්තනය
Submit Post
Submit Post

You are not connected. Please login or register

Sri Lanka Equity Forum » Stock Market News » Government sells EURO Bonds

Government sells EURO Bonds

Go down  Message [Page 1 of 1]

1 Government sells EURO Bonds on Thu Oct 29, 2015 9:08 am

peacockman


Assistant Vice President - Equity Analytics
Assistant Vice President - Equity Analytics
Government sells EURO Bonds


The Central Bank yesterday raised a $ 1.5 billion 10-year International Sovereign Bond, which it insisted showed investor confidence in the country.
The bond drew a coupon of 6.850% per annum at par on 27 October. This marks Sri Lanka’s ninth US Dollar benchmark as well as the largest offering in the international bond market since 2007. 
The bonds have been rated ‘BB-’, ‘B1’ and ‘B+’ by Fitch Ratings, Moody’s Investors Service and Standard and Poor’s respectively, the Central Bank said in a short statement.  
Citigroup, Deutsche Bank, HSBC and Standard Chartered Bank were Joint Lead Managers and Bookrunners of this successful transaction. 
“Final order books stood at $ 3.3 billion from 290 investor accounts, achieving an oversubscription ratio of 2.2 times. The allocation of the bond was 55% for The US, Europe 29% and Asia 16%. The allocation by investor type was 88% for fund managers, banks 9% and pension / insurance agencies 3%,” the statement said.
The outcome of this bond issuance shows the continued investor confidence in Sri Lanka, despite the volatility in the international bond market, it added. 
Sri Lanka paid less than it had expected to borrow $1.5 billion via a 10-year sovereign bond on Tuesday, with strong orders helping bring down the yield on the issue to 6.85 percent from initial guidance of around 7%, Reuters reported. 
The Finance Ministry will use the funds to help plug a gap in the budget, it said quoting Government sources. After the 17 August election, the new Government said it would not be able to limit the 2015 deficit to a targeted 4.4% of Gross Domestic Product due to heavy spending and weak revenue. Finance Minister Ravi Karunanayake has said the deficit is likely to reach 6.5-6.8% of GDP.
Currency dealers and economists had varied on the Government’s ability to borrow whole $1.5 billion at 7%.
Amal Sanderatne, Chief Economist and CEO at Colombo-based Frontier Research, called the initial pricing guidance “very high” compared to past Sri Lankan sovereign bonds.
On 28 May, the country had raised $650 million via a 10-year sovereign bond after aiming for $1 billion. That bond carried a 6.125% per annum yield.



29 October, 2015 08:51 AMSource: Financial Times - Sri Lanka

Back to top  Message [Page 1 of 1]

Permissions in this forum:
You cannot reply to topics in this forum