HSBC Bookrunner on sixth consecutive Sovereign Bond Issue
Thursday, 9 January 2014 00:02
The Central Bank of Sri Lanka (CBSL), on behalf of the Democratic Socialist Republic of Sri Lanka, successfully launched and priced a US$ 1 billion five-year International Sovereign Bond Issue at a yield of 6% per annum.
This marks the first Sovereign Bond Issue in the international capital markets in 2014 and the sixth US Dollar benchmark offering in the international bond markets by Sri Lanka since 2007.
HSBC Sri Lanka and Maldives CEO Patrick Gallagher said: “HSBC is extremely delighted to have supported the Central Bank of Sri Lanka, in issuing the first sovereign bond in the international capital markets in 2014 and Sri Lanka’s sixth overall.”
“Counting over 120 years in Sri Lanka, we are the only bank to have consecutively partnered the Government of Sri Lanka on all of its sovereign bond issuances since 2007. HSBC has been consistently ranked as the No. 1 debt capital markets bookrunner in Asia and this bond is a testament to the ability that we have in closing large capital market transactions, and manifests our strong and continued commitment to the country,” Gallagher added.
Fitch Ratings, Moody’s Investors Service and Standard and Poor’s have rated the Issue at ‘BB-,’ ‘B1’ and ‘B+’ respectively. The order books grew steadily, allowing Sri Lanka to price the Issue at 6% in spite of the rising benchmark US Treasury yield. This tighter yield reflects the continued confidence that the international investors have placed in the sovereign bond issuance of Sri Lanka.
Sri Lanka’s previous five-year Issuances in 2007 and 2009 were priced at yields of 8.25% and 7.40% respectively. The final order books stood at US$ 3.2 billion, an oversubscription ratio of 3.2 times. This achievement is all the more impressive, given the rising bench mark US Treasury yield and also the high volatility seen in global capital markets in recent months.
HSBC Sri Lanka Head of Financial Institutions Group Shamindra Marcelline said: “The issuance reiterates the confidence placed by the international investor community in the country’s strong credit story, clearly articulated by the robust road map laid out by the Governor of Central Bank of Sri Lanka. This also demonstrates the continued strength of our partnership in navigating the current global financial uncertainties and challenges posed.”