Sri Lanka's sovereign bond issue rated B+(EXP): Fitch

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Sri Lanka's sovereign bond issue rated B+(EXP): Fitch

Postby SHARK » Wed Apr 11, 2018 12:53 pm

ECONOMYNEXT - Fitch Ratings has assigned a B+(EXP) rating to Sri Lanka's sovereign bond issue of 5 and 10 year tenors with initial price guidance of around 6 to 7 percent.
A sovereign bond has a minimum size of 500 million dollars.

Sri Lanka was planning to raise up to 1.5 billion dollars in sovereign bonds this year depending on market conditions.

Fitch Ratings' statement is as follows:

Fitch Ratings has assigned Sri Lanka's upcoming US dollar-denominated bonds an expected rating of 'B+(EXP)'.

The expected rating is in line with Sri Lanka's Long-Term Foreign-Currency Issuer Default Rating (IDR) of 'B+' with a Stable Outlook.

RATING SENSITIVITIES
The rating would be sensitive to any changes in Sri Lanka's Long-Term Foreign-Currency IDR. In February 2018, Fitch affirmed Sri Lanka's Long-Term Foreign-Currency IDR at 'B+' with a Stable Outlook. The Long-Term Local-Currency IDR is also 'B+' with a Stable Outlook. (COLOMBO, 11 April, 2018)
Price is what you pay. Value is what you get.”

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Re: Sri Lanka's sovereign bond issue rated B+(EXP): Fitch

Postby SHARK » Wed Apr 11, 2018 11:10 pm

UPDATE :

ECONOMYNEXT - The pricing of Sri Lanka's 10-year sovereign bond that was launched Wednesday has been narrowed to 6.75 percent and while that of a 5-year bond has been narrowed to 5.75 percent, a media report said.

Bloomberg Newswires said the sale was launched earlier Wednesday with initial guidance of around 7-prce for the 10 year and 6-percent for the 5-year.

Sri Lanka started selling 5 and 10 year sovereign bonds on Wednesday starting with Asia and the issue is expected to close with the US markets closing.

Sri Lanka last sold a 10 year bond in May 2017, at 6.2 percent, when the US 10-year Treasuries yield was 2.35 percent, indicating a risk premium of 2.85 percent.

US bond yields have been around 2.6 percent for 5-year ad and 2.79 for 10 year in recent days.

The sale is managed by Citibank, Deutsche Bank, HSBC, JPMorgan and Standard Chartered.

Sri Lanka is going to the market amid some volatility in international markets with more Fed rates hikes expected later in the year. (Colombo/Mar11/2018)
Price is what you pay. Value is what you get.”

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Re: Sri Lanka's sovereign bond issue rated B+(EXP): Fitch

Postby SHARK » Thu Apr 12, 2018 9:54 am

Update

Sri Lanka sells record US$2.5bn in 5, 10-year sovereign bonds


ECONOMYNEXT - Sri Lanka has sold 2.5 billion US dollars from sovereign bonds selling 5-yaer bonds at 5.75 percent and 10-year bonds at 6.75 percent, at a time when new issue premiums were high in the market.

Bloomberg Newswires said Sri Lanka raised 1.25 billion dollars in 5-year bonds and 1.25 billion US dollars in 10-year bonds.

Sri Lanka is raising money partly to early-settle so-called 'bunched up' debt.

Sri Lanka went to the market at a time when so-called 'new issue premium' or the extra yield investors demand from new issues over existing bonds had suddenly widened to over 30 - 40 basis points from around 10 basis points, international capital market specialists said.

Sri Lanka has a below investment grade rating of B+ from Fitch.

"A dollar bond is priced based primarily on three factors," a bond market investor said. "It is based on the US Treasuries rate and the risk premium, which you can see in existing bonds and also the new issue premium."
Price is what you pay. Value is what you get.”

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Re: Sri Lanka's sovereign bond issue rated B+(EXP): Fitch

Postby prasa2004 » Thu Apr 12, 2018 2:33 pm

Very good sign. Hope rally will start after New Year

Sri Lanka sovereign bonds get US$6.5bn in orders; US buyers lead: report

ECONOMYNEXT - Sri Lanka's 2.5 billion US dollar sovereign bond sale had got 6.5 billion dollars of orders, with most of the bonds being snapped up by US investors, a report said.Bloomberg Newswires said subscriptions for a 10-year bond reached 3.5 billion US dollars. US based investors had bought 65 percent of the 1.25 billion bonds sold. Europeans had bought 29 percent and Asians 6 percent. Fund managers bought 92 percent, insurers 5 percent and banks 2 percent, Bloomberg said. Subscriptions for the 5 year bond was 3.0 billion dollars from 235 investors. US investors had bought 66 percent of the 1.25 billion dollar issue and Europe based investors 66 percent. Asian base investors bought 10 percent. Fund managers had bought 92 percent, pension funds and insurers 5 percent and banks 1 percent. Sri Lanka sold the 10-year bond at a yield of 6.75 percent and the 5-year bond at a yield of 5.75 percent. The sale is managed by Citibank, Deutsche Bank, HSBC, JPMorgan and Standard Chartered.

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Re: Sri Lanka's sovereign bond issue rated B+(EXP): Fitch

Postby prasa2004 » Fri Apr 13, 2018 6:16 am

The Central Bank on 11 April, successfully issued US$ 2.5 billion in sovereign bonds made up of US$ 1.25 billion five-year and US$ 1.25 billion 10-year maturities with maturity dates of 18 April 2023 and 18 April 2028 respectively. “This is a tremendous success story for the Government and the Central Bank which will enable us to raise funds from any of the world’s capital markets,” CBSL Governor Dr. Indrajit Coomaraswamy told Ceylon Today yesterday. He also said, this was a measure of confidence in the management of the Sri Lankan economy and that it would also assist the Government to negotiate the fifth tranche of the International Monetary Fund (IMF) Extended Fund Facility amounting to around US$ 190 million next week when the World Bank/IMF Spring meetings will be held in Washington, D.C. from 22 to 26 April. Prior to 11 April, the last time the Government issued a sovereign bond was in May. That offer valued at US$ 1.5 billion and at a 10 year tenure fetched an interest cost of 6.20 per cent for the Government.


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