Cabinet approves lead managers for $ 500 m Samurai bond

• Three companies picked for SL’s first bond issuance to the Japanese market

Cabinet this week approved the lead managers for the $500 million Samurai bond, which the Central Bank is planning to issue in late October or November.

Mizuho Securities Company Ltd., SMBC Nikko Securities Inc., and Mitsubishi UFJ Morgan Stanley Securities Co. Ltd. have been picked as the lead managers for the bond, which is the first the Central Bank will issue to the Japanese market. 

The Central Bank had earlier outlined plans to issue the bond to top up reserves and ride out any uncertainties created by the Presidential Election in mid-November, even though Sri Lanka’s next large debt repayment is only due in October 2020. 

In August, the Central Bank said it had consultations with Japan Bank for International Cooperation (JBIC), which had said it was willing to give a 95% guarantee and a flexible fee for the bond issuance. 

The Central Bank is also allowed to raise up to $2 billion more under the Liability Management Act for debt repayments next year. Ratings agencies have estimated that Sri Lanka will have to repay an average of $3.5 billion per year till about 2023.  

The Central Bank will release its latest monetary policy decision today with experts expecting rates to be held unchanged after the monetary authority unexpectedly loosened its stance last month.