Sri Lanka raises US$ 2 billion from five and 10 year sovereign bonds
SriLanka has reportedly raised US$ 2.0 billion from five and 10 year sovereign bonds, which is the second such sale in 2019.
Sri Lanka sold US$ 500 million of five year bonds for 6.35 percent and US$ 1.5 billion of 10 year bonds for 7.55 percent, Bloomberg Newswires has reported.
The yield is about 460 basis points above US Treasuries for five years and 5.53 basis points for 10 – years.
Sri Lanka has timed the bonds to go after US Treasuries yields eased and the Fed has indicated a rate cut ahead, getting a lower absolute rate than a March bond sale, the report has noted.
The bond was launched with initial price guidance of 6.60 percent for five year bonds and 7.8 percent for 10 year bonds, the report has further stated.
Sri Lanka has so far raised US$ 4.4 billion of sovereign bonds in 2019. It had also repaid US$ 1.5 billion of maturing sovereign bonds, the report has added.
According to the local media, March Sri Lanka sold US$ 1 billion in five year bonds at 6.85 percent and US$ 1.4 billion of 10-year bonds at 7.85 percent indicating a spread of about 441 basis points above US for five years and 5.21 for 10 years.
Sri Lanka is likely to go to markets for a third time in 2019, using a new debt management law to raise funds for maturing debt in 2020, which will be an election year, media reports state.
OSL take:
The raising of US$ 2 billion through sovereign bonds by the Sri Lankan government is indicative of the level of confidence the international community has on the country’s economic growth and strength. Sri Lanka’s economic policies have been hailed by the international community as well as the foreign lending agencies. The government of Sri Lanka has also taken many steps to improve the ease of doing business environment in the country thereby making it more attractive for foreign businesses/investors to enter into the country. Therefore, foreign businesses/investors could confidently explore business/investment opportunities in Sri Lanka.
| Article Code : | VBS/AT/26062019/Z_4 |