HSBC, Merrill Lynch, RBS, Barclays to manage Sri Lanka sovereign bond

Friday, 24 June 2011 03:16 -     - {{hitsCtrl.values.hits}}

The Central Bank yesterday named HSBC, Bank of America, Merrill Lynch Royal Bank of Scotland, and Barclays Capital as lead managers for a future sovereign bond issue.

Sri Lanka is expected to issue $1 billion of sovereign bonds, its fourth such programme, with a likely maturity of 10 years to retire some loans taken for a raft of post-war infrastructure projects, the Central Bank has said.  The Central Bank, in a statement, said it had selected the four banks as joint lead managers to advise and handle the bond issue from among seven leading international banks/investment houses.

Except Barclays Capital, all the others managed a $1 billion, 10-year bond last year.

Ajith Nivard Cabraal, the Central Bank governor, said the bond may have a maturity of up to 10 years.

“We will meet with lead managers shortly to discuss on this. Of course we are looking for a 10-year one and the amount is $1 billion. We will be guided by lead managers’ advice on the timing,” Cabraal told Reuters. 

On Wednesday, Cabraal said the country expects a yield of slightly below 6 percent for the upcoming eurobond.

Sri Lanka’s debut $500 million 5-year eurobond, maturing in 2012 with a coupon of 8.25 percent, is now trading at around 2.2 percent to 2.6 percent.

A second $500 million bond, due 2014, sold in 2009 with a coupon of 7.4 percent and is now trading at 4.2 percent to 4.5 percent, Reuters data showed.

The third one, a $1 billion, 10-year eurobond sold last year with a coupon rate of 6.25 percent is now trading at 6.1 percent to 6.2 percent.