Samurai bond delayed till next month

Sri Lanka’s maiden US$ 500 million (60 billion yen) 10 -year Samurai bond issuance has been pushed to December from this month, mainly due to extensive translation work involved in the issuance. 

“All the legal documents have to be translated into Japanese. It takes a bit of time with the language and document process. As this is also the first time we are issuing Samurai Bonds, the AG’s Department wants to scrutinise everything,” Central Bank Governor, Dr. Indrajit Coomaraswamy said.

However, he noted that the outcome of the upcoming Presidential election is unlikely to impact the bond issue as the Japan Bank for International Co-operation (JBIC) has agreed to provide 95 percent guarantee for the bond along with the Japanese government’s sovereign risk.

“We are hoping that it won’t make a too much of a difference as 95 percent of principal has been guaranteed by JBIC and our exposure is only 5 percent. Therefore, we are hopeful that with the JBIC guarantee, we will be able to raise that money at a good rate,” he said. 

Mizuho Securities Company Ltd., SMBC Nikko Securities Inc. and Mitsubishi UFJ Morgan Stanley Securities Co. Ltd. have been appointed as the three joint lead managers for the issuance.

Sri Lanka’s foreign reserve currently stands at US$ 7.7 billion providing an import cover of 4.5 months and covering 60 percent of short-term debt obligations. (NF)