Lanka raises US$ 100 mln syndicated international loan

Sri Lanka has raised a syndicated loan of US$ 100 million in the international market, the Central Bank said this week, adding that several leading international banks in the Middle Eastern and Asian financial markets participated in the loan.

Citigroup acted as the facility agent. The selection of Citigroup was done after evaluating competitive proposals submitted by several banks. The loan agreement was concluded with the Citigroup on November 14 and the funds were obtained on December 21. The loan proceeds will be utilised to meet the general development expenditures including infrastructure projects. It will also help to further stabilize domestic interest rates since these funds were raised in the international market, the Bank said.

“The syndicated loan is for a maturity period of 3 years and it carries an interest margin of 75 basis points per annum (all inclusive margin of 1.035%) over USD LIBOR which is highly attractive compared to interest rates prevailing in the domestic market for the same maturity period.

In addition, this transaction favourably compares with the syndicated loan of US$ 100 million (3 year maturity) raised in 2005 which carried a margin of 95 basis points per annum,” the statement added.