$ 1.5 b Sovereign Bond draws over $ 12 b in demand

Sri Lanka’s $ 1.5 billion 10-year Sovereign Bond issue launched yesterday had racked up over $ 12 billion in demand, the Daily FT learns. 

An International Financing Review (IFR) report out of Singapore said Sri Lanka, rated B1/B+/B+, has tightened final guidance to 6.25% area, plus or minus 5bp, for a 10-year US dollar bond offering. “Initial yield guidance was 6.625% area. Orders are over $ 7.75 billion,” it added.

The $ 12 billion plus figure was confirmed by sources at the time this edition went to press. The yield guidance was said to be 6.2%.  IFR report said the benchmark senior unsecured bonds are expected to be rated in line with the issuer.

The bonds are being offered under 144A/Reg S and will price today (yesterday) in New York hours. Citigroup, Citic CLSA, Deutsche Bank, HSBC, ICBC International, JP Morgan and Standard Chartered are joint bookrunners.

In a related development, Fitch Ratings said last morning it has assigned Sri Lanka’s upcoming US dollar-denominated bonds an expected rating of ‘B+(EXP)’.

The expected rating is in line with Sri Lanka’s Long-Term Foreign-Currency Issuer Default Rating (IDR) of ‘B+’ with a Stable Outlook. The rating would be sensitive to any changes in Sri Lanka’s Long-Term Foreign-Currency IDR. In February 2017, Fitch affirmed Sri Lanka’s Long-Term Foreign-Currency IDR at ‘B+’ and revised the Outlook to Stable from Negative. The Long-Term Local-Currency IDR is also ‘B+’ with a Stable Outlook.