Green Money

Solomon Smith Barney, the investment-banking arm of the Citigroup has secured the mandate to raise US$ 150 mn for the government.
The mandate is part of the governments fund raising exercise to raise US$ 350 mn in long-term funds for 2002.rn

rnThe five-year syndicated loan will be backed by Nippon Export Investment Insurance Company of Japan, says Kapila Jayawardene, CEO Citibank Sri Lanka.rn

rnJayawardene did not give the cost of the syndication, but market players put the price at 250 basis points over the six months London interbank offered rate (LIBOR).rn

rnThe Finance Ministry is tipped to announce the lead manager for the balance US$ 200 mn on Tuesday.rn

rnAround 12 international investment banks had earlier responded to the governments invitation, with suggestions ranging from a syndication loan, a floating rate note (FRN) or a rated bond issue.rn

rnThe Central Bank had evaluated some 40 proposals and submitted three names endash Deutsche Bank, UBS Warburg and Solomon Smith Barney with Citibank to the Treasury for approval.rn

rnOnce Treasury clearance comes through, the joint lead managers are expected to raise funds through an international roadshow.rn

rnProspective investment bankers have said they could raise the funds within a month of the mandate being given.rn

rnSri Lanka does not have a sovereign rating, but Fitch Ratings Lanka Ltd, has said a country rating would be in the range of a B+ and BB+. rn

rnFor Citibank, the mandate is another feather in its cap. The bank has aggressively moved up the ladder to become one of the top foreign banks and competes head on with HSBC and Standard Chartered Grindlays Bank.rn

rnFor the first six months to June 30, 2002 Citibanks turnover grew 24 percent to Rs. 679.7 mn year on year.rn

rnNet income from banking activities shot up 53 percent to Rs. 322.6 mn, while post-tax profits picked up 22 percent to Rs. 196.7 mn.rn

rnNet loans and advances surged 81 percent to Rs. 5.8 bn, while deposits had increased by 57 percent to Rs. 5.8 bn. rn

rnDuring the period under review, the banks total assets rose 69 percent to Rs. 13.0 bn, which makes Citibank on of the biggest US investments in Sri Lanka.rn