July 20, 2011 (LBO) – Pricing guidance to fund managers on a billion dollar sovereign bond for Sri Lanka has been tightened from an initial 6.5 percent to around 6.3 percent amid strong demand, financial market sources said. Sri Lanka has reported lower inflation and high growth of around 8.0 percent and the government’s budget deficit is trending down. Last year Sri Lanka sold a 10-year bond for 6.25 percent but Sri Lanka’s credit has since been upped though international bond markets are jittery due to sovereign credit issues in Europe.
A source familiar with the deal said demand has been strong for the bond.
Fitch Ratings gave the proposed 10-year bond a rating of ‘BB- (exp)’ Wednesday after it was officially launched to fund managers.
The agency had earlier upgraded Sri Lanka by one notch. Moody’s and Standard and Poor’s also lifted the outlook on their B+ rating to ‘positive’ ahead of the bond launch.