Sri Lanka new 5-year sovereign bond pricing will help private firms: Standard Chartered

Jan 08, 2014 (LBO) – A 6.0 percent benchmark yield on a billion US dollar sovereign bond will help corporates seeking foreign finance this year, Standard Chartered Bank said. The bond was lead managed latest sovereign bond was managed by Citi, HSBC, Standard Chartered and UBS.

Sri Lanka sold the bond following some uncertainty in international markets as the Federal Reserve’s dangerous easy money policies which had encouraged risky behaviour were expected to end and US Treasuries yields edged up.

Colin Pawley, Standard Chartered’s head of origination and client coverage said the bond at 6.0 percent was sold “inside the theoretical fair value for a new 5-year bond” based on already issued bonds of a longer tenors.

“We expect to see a number of Sri Lankan Corporates issue similar Bonds in 2014 and this landmark issuance will help pave the way for them to tap the international capital markets,” he said.

Sri Lankan corporates including John Keells Holdings is expected to raise funds abroad.

Last year in jittery markets quasi-sovereign National Savings Bank paid 8.875 percent for a 750 million US dollar issue, a listed DFCC Bank paid higher.