Sri Lanka’s national carrier to sell US$ 175 million bond
Sri Lanka’s state owned SriLankan Airlines is reportedly looking at selling a US$ 175 million bond to roll-over a similar sized issue that is maturing this month, which is fully guaranteed by the government.
Fitch Ratings has reportedly stated that the bond has been a given provisional rating of ‘B (EXP)’ in line with the sovereign rating.
“The proposed bonds are rated at the same level as the bonds issued by SLA’s parent, the government of Sri Lanka (B/Stable), due to the unconditional and irrevocable guarantee provided by the government,” Fitch has reportedly stated.
Bloomberg Newswires has stated that Credit Suisse and StanChartered are to jointly manage the bond sale.
According to reports, the rating on the bonds is equalized with the long-term foreign currency sovereign credit rating on Sri Lanka (B/Stable/B), and is based on the timely, unconditional, and irrevocable guarantee by the government.
The obligations of the government as guarantor under the guarantee for the bonds constitute unsecured and unsubordinated obligations of the guarantor, and shall, at all times rank at least equally with all its other present and future unsecured and unsubordinated obligations, save for the exceptions as may be provided by applicable legislation and subject to the deed of guarantee, local media reports state.
OSL take:
The government of Sri Lanka is engaged in a programme to revive the country’s national carrier, SriLankan Airlines. Discussions have already been held with several foreign parties to discuss the possibility of forming a joint venture. The government has also launched several programmes to uplift the country’s aviation industry and has also commenced a project to develop the airport network as well. With Sri Lanka’s tourism sector expected to see a boom by the end of the year, the country’s aviation industry will also see a boost. Therefore, foreign businesses/investors could explore business/investment opportunities in Sri Lanka’s aviation industry.
| Article Code : | VBS/AT/21062019/Z_2 |