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Sri Lanka in $500 mln, 5-yr bond sale
Wednesday, 14 October 2009 - 8:29 PM SL Time
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* Sri Lanka selling bond due Jan. 2015 to raise $500 mln
* Deal to be executed this week price guidance likely Weds.
* Only S.Lanka`s 2nd global bond offering since debut in 2007
COLOMBO/HONG KONG, Oct 14 (Reuters) - Sri Lanka is opening orders for only its second global bond ever, aiming to raise $500 million after investor sentiment towards the South Asian country improved sharply with the end of a 25-year civil war.
The country, which debuted in the international bond market in 2007, is selling dollar bonds due in January 2015 in an offering handled by JPMorgan, HSBC and The Royal Bank of Scotland.
`The central bank has launched the sovereign bond today. An official announcement will follow soon,` a senior central bank official in Colombo told Reuters on condition of anonymity.
Another senior central bank official and a banker at one of the lead managing banks also confirmed the launch.
A Hong Kong-based source close to the deal said the transaction was likely to be executed this week and price guidance could be announced later on Wednesday.
Sri Lanka has indicated it would like to pay 7 percent for the bond, but investors are expected to demand a higher yield.
Sri Lanka has seen its investment attractiveness grow since it defeated the Tamil Tiger rebels in May and secured a $2.6 billion International Monetary Fund (IMF) loan in July.
Encouraged by the end of the civil war, Sri Lanka`s stock market .CSE has returned over 108 percent so far this year -- the second-best performing bourse in the world after Peru -- while tourist arrivals have surged 25.2 percent since May.
Sri Lanka plans to use the bond`s proceeds to pay off existing treasury securities sold at higher yields in the past to fund infrastructure projects, the central bank has said.
Under the IMF agreement, Sri Lanka this year can borrow no more than $500 million externally.
On Wednesday, ratings agency Standard & Poor`s gave the proposed bond offering its `B` senior unsecured debt rating, citing the expected peace dividend and favorable economic growth prospects. But it added Sri Lanka`s ratings were constrained by perennially large fiscal deficits and its resultant high level of public debt. [ID:nWLA5606]
In August, S&P raised its outlook on the country`s B rating to stable from negative, while rival Fitch followed this week with a similar change in outlook for its B-plus rating. [ID:nWNA5646]
The country`s first $500 million, five-year bond LK032736246= is yielding about 7 percent compared to a high of 25 percent late last year when the central bank was struggling to rein in soaring inflation.
Yields have fallen steadily since the conflict with the separatist rebels ended in May, and the central bank has pushed its policy rates lower to encourage lower market lending rates.
That regime has made existing rupee-denominated debt with much higher yields, including $875 million in 4- and 6-year bonds sold to a U.S. investment fund in August with a coupon rate of 12.90 percent, more valuable on the secondary market.
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Naaca
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 14 Oct 2009 13:36:33 GMT Report for Abuse
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Dear Peelamists and UNPers
Please don't get upset....punnakku from Reuters this time! |
Piyal
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 14 Oct 2009 14:23:03 GMT Report for Abuse
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James Bond ?
Shane Bond ?
Warnakulasuriya Patabendige Ushantha Joseph Chaminda Vaas Bond ? |
Imperator
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 14 Oct 2009 14:23:13 GMT Report for Abuse
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| How are the sour grapes? More punakku from TamilNut and LNW will make the taste go away :)) |
toyya
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14 Oct 2009 14:29:45 GMT Report for Abuse
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tigeress19
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LK Information 14 Oct 2009 14:05:56 GMT Report for Abuse
I think atleast by now...we should accept the names like.. madayans.... gullible... jokers... monkeys...
i think we are indeed....
madayans.... gullible... jokers... and monkeys...
Duuuuhhhhhhhhhhhh..........!!!
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AstroLTTE
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 14 Oct 2009 14:39:49 GMT Report for Abuse
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| Aiyo....Kadawale.... Thol guy and Kanamoshi met Mahinda......what happened to all the big talks.....? :-))) |
AnuD
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 14 Oct 2009 14:55:48 GMT Report for Abuse
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At present the Rates are almost ZERO if not ZERO. Why these hugh loans are taken at these rates.
Even 5 year mortgage loans are at about 3 - 4% I think. these are long term.
Mutual funds give money at 13%.
These are like high way robberies.
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lankaputha
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14 Oct 2009 14:58:47 GMT Report for Abuse
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| Another 500 Million $ plus the interest to be paid at the end of the 5 year term, and it will be done by some one else, and was bought for the luxury life of MR and the gang |
toyya
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14 Oct 2009 14:59:12 GMT Report for Abuse
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http://www.youtube.com/watch?v=0Tjs-8NJTRU
a big mac Tamil begging the white masters.....
he he heeeee |
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14 Oct 2009 14:10:32 GMT