Sri Lanka sovereign bond deal gets accolade

Chairman of the Colombo Stock Exchange Dumith Fernando presenting the sponsorship cheque to President of CA Sri Lanka Manil Jayesinghe

Dec 13, 2011 (LBO) – A billion dollar 10-year sovereign bond for Sri Lanka has won praise from a specialist regional financial publication, saying the deal brought the country closer to seasoned Asian borrowers like Philippines and Indonesia. “Few other contenders can stand up against the sovereign, which has continued to lead the way,” FinanceAsia magazine said in its 2011 Achievement Awards.

“The country’s recovery story clearly resonates with investors, who continue to show strong demand.”

The dollar denominated bond was sold at 6.25 percent, 40 basis points less than a year earlier.

The bond was sold by Bank of America Merrill Lynch, Barclays, HSBC, Royal Bank of Scotland.

“Sri Lanka’s sovereign bond was also well-timed to take advantage of a ratings upgrade from Fitch to BB- from B+,” Finance Asia said.

“While the country devalued its currency by 3 percent after the bond issue — which some said had a psychological effect on investors — it is worth pointing out that the bonds were still holding up above par in December.”

Sri Lanka’s private firms are still not raising money actively abroad.

Private firms won deals in other Asian nations. The best Vietnam deal went to a 1.5 billion dollar financing for a private power projects by Standard Chartered.

In Indonesia a billion dollars 10 year bond and 500 million dollars 30-year bond for Pertamina, a state-run oil firm by Citi, Credit Suisse and HSBC was chosen as the best deal.