Friday Dec 13, 2024
Friday Dec 13, 2024
Saturday, 6 May 2017 00:06 - - {{hitsCtrl.values.hits}}
Standard Chartered has successfully priced a USD 1.5 billion 10-year fixed rate senior unsecured 144A/Reg S issuance for Sri Lanka. This marks the sovereign’s eleventh US dollar benchmark offering in the international bond markets since 2007 and reflects the continued international institutional support for Sri Lanka through the years. 
Standard Chartered CEO Jim McCabe commenting on the deal said: “We are honoured to be a lead arranger for the Government’s international bond issue. Road shows conducted by the teams in the US, UK, Middle East and Asia helped build up market momentum and have brought in over USD 11 billion in orders from a record 500 investors. The transaction priced well inside the initial price guidance of 6.625% area, represents a price tightening of 42.5bps. This is the maximum price tightening ever achieved by a Sri Lankan issuer.”
While the market was still anxious about the US non-farm payroll data later in the week and the result of the French elections over the weekend, the positivity created by the International Monetary Fund (IMF) announcement was clearly reflected in the strong order book. The orders grew swiftly, with books garnering strong demand from institutional investors in Asia and were fully covered in the first couple of hours. Investor interest from quality accounts allowed the book runners to indicate an aggressive final price guidance of 6.25% (+/-5bp) and the deal was successfully valued at the tighter end of final price guidance at 6.20%.
Standard Chartered Head of Financial Institutions Lakshan Goonetilleke stated: “The transaction was extremely well timed. The Central Bank took advantage of a window of opportunity post the announcement of the staff level agreement with the IMF and just before the French elections, when investors were looking to buy strong emerging market bonds. The seven-time over subscription reflects the confidence investors have in Sri Lanka and its long term prospects.”
Sri Lanka is rapidly consolidating its status as a country on the rise, characterised by considerable growth, an increasingly diversified economy, a stable political climate and an improving institutional and government framework. The country is currently in the process of reform via its commitment to the IMF’s extended fund facility (EFF) program. The Government is taking decisive action to correct current imbalances, reduce liquidity pressure, catalyse investment and drive sustainable fiscal consolidation. The Sri Lankan economy grew considerably by 4.4% in 2016, whilst remaining within mid-single digit inflation levels, a considerable feat when compared to other emerging market economies.
Standard Chartered continues to remain a dominant player in Asia and has lead managed all the international issuances by the Government of Sri Lanka since 2014, evidencing the Bank’s strong relationship founded on continuous engagement and a committed local presence.
