Sri Lanka to raise USD500 mln through syndicated loan: Governor


May 04, 2016 (LBO) – Sri Lanka is planning to raise 500 million dollars through a syndicated loan and terms are being discussed, the Central Bank Governor said.

Citi Emirates, NDB, HSBC and Mashreq bank are expected to be mandated to arrange a 3-year term loan that will be repaid in installments, Bloomberg reported citing sources.

Mahendran told Lanka Business Online that plans for the syndicated loan have been in the works and a technical committee is working out the terms of the loan.

“We have been negotiating the terms. Particularly after the IMF agreement banks are looking at us more favorably, and terms should become more lighter,” he said.

With confirmation of a technical agreement with the IMF, Sri Lanka is expected to go to international markets to raise up to three billion dollars through a sovereign bond issue, as part of plans in the pipeline to bridge government finances.

The external debt of the country increased to 44.8 billion dollars, or 54.4 percent of GDP in 2015, from 42.9 billion dollars, or 53.6 percent of GDP in 2014, according to Central Bank data.

Debt servicing as a percentage of exports increased to 27.7 percent in 2015, from 20.8 percent the previous year. Borrowings this year are expected to go towards debt repayment obligations and interest servicing.