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

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.