Sri Lanka’s Central Bank Governor says country could sell Samurai and Panda bonds in 2018
Governor of the Central Bank of Sri Lanka (CBSL) Indrajit Coomaraswamy has reportedly said that Sri Lanka is open to selling a Samurai (Yen) or Panda (Renminbi) bonds in 2018 after a US dollar denominated international sovereign bond sale is wrapped up.
Sri Lanka has already called for managers to sell up to US$ 2.0 billion in sovereign bonds in 2018.
The country has sold up to US$ 1.5 billion in bonds in a single offering in the past.
The sovereign bond is expected to go market early this year, before the Fed raises rates again, reports state.
Sri Lanka’s last issued sovereign bond is also trading around 60 basis points narrower, and rating agencies have already given an outlook upgrade.
The Governor has noted that Sri Lanka was agnostic about the denominating currency, and was open to selling a Samurai or Panda bond after the dollar sovereign bond if the cost and tenor is right.
A Samurai bond is expected to allow Sri Lanka to enter into the Japanese bond market, while a Panda bond would allow the country to enter the Chinese capital market.
Meanwhile, market analysts have been quoted in the media as saying it would be possible to sell a Samurai bond with a currency swap at a lower rate than a euro dollar bond of a similar maturity.
OSL take:
The statement by the Governor of Sri Lanka’s Central Bank on the possibility of selling Japanese Samurai and Chinese Panda bonds this year is an investment opportunity for foreign investors looking at buying into the bonds from Japan and China. Sri Lanka is also looking at going for a sovereign bond sale in 2018 going up to US$ 2 billion and looking at the possibility of entering into the Japanese and Chinese markets through Samurai and Panda bond sales. Therefore, investing in Sri Lanka’s sovereign bonds would be an ideal investment opportunity.
| Article Code : | VBS/AT/20180129/Z_2 |