Sri Lanka’s bond to be listed on LSE’s International Securities Market for first time

Mar 08, 2019 (LBO) – Sri Lanka’s successful international sovereign bond offering is expected to be listed on the London Stock Exchange (LSE), to be admitted to the LSE’s International Securities Market (ISM) for the first time, the Central Bank said.

This is in addition to the listing on the Singapore Exchange Securities Trading Limited (the SGXST), for the listing and quotation of the Bonds on the SGXST.

Sri Lanka returned to the USD bond markets, pricing a new issuance of 1.0 billion dollars 5-year and 1.4 billion dollars 10-year senior unsecured fixed rate bonds.

Releasing a statement, the Central Bank said the bonds eventually priced with a yield of 6.85 percent and 7.85 percent for 5 and 10 year tranches, representing price tightening of 35 bps from initial guidance, for both tranches.

This marks Sri Lanka’s thirteenth USD benchmark offering in the international bond markets since 2007,
reflecting the international investor community’s continued support for Sri Lanka through the years.

Full statement

The Democratic Socialist Republic of Sri Lanka USD 2.4 billion International Sovereign Bond Offering

On March 7th, 2019, the Central Bank of Sri Lanka (CBSL), on behalf of the Democratic Socialist
Republic of Sri Lanka (Sri Lanka), returned to the USD bond markets, successfully pricing a new
issuance of USD 1.0 billion 5-year and USD 1.4 billion 10-year Senior Unsecured Fixed Rate Bonds (the
Bonds) with maturity dates of March 14th, 2024 and March 14th, 2029, respectively. The Bonds have
been rated ‘B2’, ‘B’ and ‘B’ by Moody’s Investors Service, Standard and Poor’s and Fitch Ratings
respectively.

This marks Sri Lanka’s thirteenth USD benchmark offering in the international bond markets since 2007,
reflecting the international investor community’s continued support for Sri Lanka through the years. BOC
International, Citigroup, Deutsche Bank, HSBC, J.P. Morgan, SMBC Nikko and Standard Chartered
Bank acted as the Joint Lead Managers and Bookrunners on the successful transaction.

Capitalizing on the strong market backdrop, and leveraging on the positive momentum generated by the
recent IMF staff-level agreement on the fifth review of Sri Lanka’s Extended Fund Facility, Sri Lanka
announced the transaction during the Asia morning of March 7th, 2019. The joint syndicates released
terms and initial price guidance for new 5-year and 10-year tranches at 7.20% area and 8.20% area
respectively. The transaction saw strong interest from a wide range of high quality investors, which
allowed Sri Lanka to tighten final price guidance to 6.90% (+/- 5bps) on the 5-year tranche, and 7.90%
(+/- 5 bps) on the 10-year tranche. The Bonds eventually priced at the tighter end of the range during
New York hours, with a yield of 6.85% and 7.85% for the new 5-year and 10-year tranches, respectively,
representing price tightening of 35 bps from initial guidance, for both tranches.

The final orderbook stood at over USD 2.7 billion across 190 accounts for the 5-year tranche and over
USD 4.8 billion across 252 accounts for the 10-year tranche – clearly reflecting global investors’
continued confidence and positive outlook on Sri Lanka’s economic growth story.

The orderbook was well diversified across both tranches. The 5-year tranche saw allocations of 39% to the U.S., 38% to Europe, and the remaining 23% to Asia. By investor type, the split was 91% to fund managers, 5% to insurance and pension funds, 3% to banks, and 1% to other investors. The 10-year tranche saw allocations of 44% to the U.S., 39% to Europe, and the remaining 17% to Asia. By investor type, the split was 90% to fund managers, 5% to insurance and pension funds, 4% to banks, and 1% to other investors.

In a first for Sri Lanka, the Bonds are also expected to be listed on the London Stock Exchange (LSE), to be admitted to the LSE’s International Securities Market (ISM), in addition to the listing on the Singapore Exchange Securities Trading Limited (the SGXST), for the listing and quotation of the Bonds on the SGXST.