The Central Bank (CB) announced on Friday that there had been a tremendous response to the government's $500 million, 5-year sovereign bond issue with a coupon of 7.40%, the first international offering following the end of the internal conflict.
In a statement, the CB said the offering attracted an orderbook that was oversubscribed by more than 13 times which is one of the highest levels of oversubscription of any sovereign US dollar bond offering during 2009 year-to-date.
CB Governor Ajith Nivard Cabraal was quoted as saying that the CB is pleased with the outcome of the latest sovereign US Dollar bond issue. “The strong response signifies the heightened confidence of investors globally in Sri Lanka and the country’s enhanced growth prospects following the end of the conflict.
This transaction broadens our international investor base substantially and enhances Sri Lanka’s financial flexibility for the future.” According to the CB, the government will use the net proceeds from the Offering to supplement available concessional funds to develop infrastructure projects that were previously approved by the government and included in the current 2009 Budget.
The CB stated that orders were received from 269 investors from investors in the United States, Europe and Asia. HSBC, J.P. Morgan and The Royal Bank of Scotland acted as joint lead managers and joint bookrunners on the Offering.