Home / TOP STORY/ Big demand from global investors for SL’s mega $ 2.5 b Sovereign Bond

Big demand from global investors for SL’s mega $ 2.5 b Sovereign Bond

Comments / {{hitsCtrl.values.hits}} Views / Tuesday, 17 April 2018 00:30


  • $ 1.25 b each 5- and 10-year tenure offerings draw $ 6.5 b bids from over 400 investors
  • Over 65% of allocations to investors based in the US, over 24% in Europe and over 6% in Asia
  • Majority of investors are fund managers; insurance, pension funds and banks chip in
  • Coupon of 5.75% for 5-year and 6.75% for 10-year tranches
  • CB says strong reflection of the international investor community’s continued support for Sri Lanka
  • HSBC, Standard Chartered Bank, Citigroup, Deutsche Bank and JP Morgan act as Joint Lead Managers and Bookrunners


Sri Lanka’s largest ever Sovereign Bond issue with a combined value of $ 2.5 billion successfully concluded late last week, drawing widespread demand from global investors and enabling the Central Bank to close the issuance at attractive pricing with the help of Joint Lead Managers and Bookrunners.

On 11 April 2018, the Central Bank, on behalf of the Government, marked its return to the US dollar bond markets with a successful issuance of a new $ 1.25 billion 5-year and $ 1.25 billion 10-year Senior Unsecured Fixed Rate Notes with maturity dates of 18 April 2023 and 18 April 2028 respectively. 

The notes have been rated B1, B+ and B+ by Moody’s Investors Service, Standard and Poor’s and Fitch Ratings respectively.

The Central Bank said the issue marked Sri Lanka’s 12th US dollar benchmark offering in the international bond markets since 2007. 

“This also represents the largest offshore bond offering ever by Sri Lanka and is a strong reflection of the international investor community’s continued support for Sri Lanka through the years,” it added. Citigroup, Deutsche Bank, HSBC, J.P. Morgan and Standard Chartered Bank acted as the Joint Lead Managers and Bookrunners on this successful transaction.

Identifying a supportive issuance window in a challenging market environment, Sri Lanka announced the transaction during the Asia morning of 11 April 2018. The joint syndicates released terms and initial price guidance for the new 5-year and 10-year tranches at 6.00% and 7.00% areas, respectively. The transaction saw strong interest from a wide range of high quality investors, which allowed the issuer to tighten price guidance by 25 bps each across both tranches. 

The notes eventually priced during New York hours, well inside the initial price guidance with a coupon of 5.75% and 6.75% for new 5-year and 10-year tranches respectively.

The final order book stood at $ 3 billion across more than 235 accounts for the five-year tranche and $ 3.5 billion across more than 190 accounts for the 10-year tranche. 

“This clearly reflects investors’ continued confidence in Sri Lanka and its economic outlook,” the Central Bank said.

It also said the order book was well diversified across both tranches. The five-year tranche saw allocations of 66% to the US, 24% to Europe and the remaining 10% to Asia. By investor type, the split was 92% to fund managers, 5% to insurance and pension funds, 2% to banks and 1% to private banks. The 10-year tranche saw allocations of 65% to the US, 29% to Europe and the remaining 6% to Asia. By investor type, the split was similar to the five-year tranche i.e. 92% to fund managers, 5% to insurance and pension funds, 2% to banks and 1% to private banks.

In a related statement HSBC Sri Lanka and Maldives CEO Mark Prothero said: “The sovereign announced a dual tranche offering on 11 April 2018 and once again displayed its savviness to remain nimble and responsive to market conditions and successfully capturing a stable market window. This transaction signals the continued confidence placed by the international investor community in the country’s strong credit and growth story.”

HSBC, which has partnered with the Sri Lanka Sovereign on all of its international bond issuances since 2007, also said it was proud to support the country on its growth journey.

Standard Chartered Chief Executive Officer Jim McCabe said: “We are proud to be part of this success as this represents the largest ever bond offering by the Democratic Socialist Republic of Sri Lanka and incidentally is the seventh consecutive USD Bond offering Mandate for Standard Chartered. This also confirms the investor sentiment towards Sri Lanka and its continued growth story as we are committed to the development of the country and are here for good.”


Share This Article


1. All comments will be moderated by the Daily FT Web Editor.

2. Comments that are abusive, obscene, incendiary, defamatory or irrelevant will not be published.

3. We may remove hyperlinks within comments.

4. Kindly use a genuine email ID and provide your name.

5. Spamming the comments section under different user names may result in being blacklisted.


Today's Columnists

In the desert of Tamil films, actor Sivaji Ganesan was an oasis

Saturday, 22 September 2018

‘Indian Film,’ first published in 1963 and co-authored by former Columbia University Professor Erik Barnouw and his student Dr. Subrahmanyam Krishnaswamy, is considered a seminal study of the evolution and growth of Indian cinema. The book is cit

Imran may turn blind eye to blasphemy law and persecution of Ahmadiyyas

Saturday, 22 September 2018

There are clear signs that Pakistan’s freshly minted Prime Minister, Imran Khan, will make a sincere effort to reduce corruption and maladministration in the domestic sphere. In foreign affairs he is likely to make a brave attempt to mend fences wi

The rate of exchange, capital flight and the Central Bank

Friday, 21 September 2018

The Central Bank (CBSL) exists for the sole purpose of price stability. Its controls on the financial system and monetary policy exist to maintain price stability. As put forth many times by the Governor, the failing of the CBSL to control inflation

Red flag over the Sri Lankan Navy

Friday, 21 September 2018

Shocking story Rusiripala, a former banker in Sri Lanka, who has taken to writing in Daily FT, is perturbed by the red flag I have raised (Daily FT article 18 September) over the shocking charge that our Navy had operated a ransom gang that had abduc

Columnists More