Samurai bond likely after parliamentary election

Sri Lanka’s maiden US $ 500 million (60 billion yen) 10-year Samurai bond issuance is likely to be launched after the parliamentary election, which is expected to be held in April, the government sources told Mirror Business. 

The Japan Bank for International Co-operation (JBIC) had earlier agreed to provide 95 percent guarantee for the bond, along with the Japanese government’s 
sovereign risk. 

However, the JBIC has informed the Sri Lankan government that it would reconsider the guarantee for the bond issuance after the forthcoming parliamentary elections. 

Sri Lanka was initially scheduled to launch the bond in November last year. However, it was delayed due to the extensive paperwork and the presidential election. 

Mizuho Securities Company Ltd, SMBC Nikko Securities Inc. and Mitsubishi UFJ Morgan Stanley Securities Co. Ltd had been appointed as the three joint lead managers for the issuance.
Sri Lanka has Rs.2 trillion debt servicing obligations, including Rs.1.1 trillion (around US $ 5.5 billion) worth foreign debt service obligations for this year.

Speaking to Mirror Business, Treasury Secretary S.R. Attygalle said that the government is in a comfortable position to service the debt during the first half of the year as the first major external debt repayment is scheduled in October with the maturity of the US $ 1 billion international sovereign bond. 

At end-2019, Sri Lanka maintained gross official reserves worth of US $ 7.5 billion, equivalent to four and a half months of imports.