Sri Lanka 5-year yield a new benchmark: Standard Chartered

Mar 08, 2014 (LBO) – Sri Lanka’s 5-year bond at 5.125 percent set a new benchmark and showed investor appetite for the country’s credit, Standard Chartered Bank, a joint lead arranger to the sale said. Yields on emerging market bond spiked in the second half of 2013 amid uncertainty over a decision by the US Federal Reserve to gradually end or taper its extraordinary money printing activities which fueled bubbles in commodities, metals and precious metals, including gold.

In January a similar tenor bond was sold at 6.0 percent.

“This is the lowest price at which the Sovereign or any Sri Lankan Corporate has raised funds via the international bond market,” Lakshan Goonetilleke, Director of Financial Institutions, Standard Chartered said.

“While markets have been extremely volatile post the release of key US data, Government of Sri Lanka bonds continued to outperform similar rates Asian bonds. Like us, international investors clearly believe in the Sri Lanka story.”

The offer was oversubscribed 8.3 times drawing orders over four billion US dollars.

“This is a clear indicator that markets and investors are very receptive to Sri Lanka’s Sovereign bonds,” Colin Pawley, Head Corporate and Institutional Clients at Standard Chartered said.

“The price reflects the underlying improvement in Sri Lanka’s economic indicators and establishes a record new benchmark for the country.”