HSBC partners with GoSL for first sovereign bond, dual-tranche issuance for 2016

The Central Bank of Sri Lanka (CBSL), on behalf of the Democratic Socialist Republic of Sri Lanka, successfully launched and raised US $ 1.5 billion in a dual-tranche five and 10-year bond. The size of the new 5.5-year bond was US $ 500 million with a coupon of 5.75 percent p.a. maturing in 2022. 

The size of the new 10-year bond was US $ 1 billion with a coupon of 6.825 percent p.a. maturing in 2026. This marks the first sovereign bond issue in the international capital markets in 2016 by Sri Lanka and the 10th US dollar benchmark offering in the international bond markets by the sovereign. This is also the first-ever dual-tranche issuance by the Government of Sri Lanka. 

HSBC was the joint lead manager, bookrunner and the ratings advisor for this bond issuance and the only bank in Sri Lanka to consecutively partner with the sovereign on all its bond issuances. HSBC has also been consistently ranked as the No.1 debt capital markets bookrunner in Asia. 

HSBC Sri Lanka and the Maldives CEO Patrick Gallagher said, “In accessing two parts of the curve simultaneously, the sovereign has demonstrated its ability to remain nimble and responsive to investor needs. The engagement from different pockets of interest at the short-end and long-end further demonstrates the breadth of the sovereign’s investor base and confirms its position as a premier issuer in the capital market. 
HSBC’s partnership with the Government of Sri Lanka in this landmark dual-tranche issuance is a testament to our expertise in closing large capital market transactions. Retracing our 124-year history in Sri Lanka, this also manifests HSBC’s strong and continued commitment to the country.”

Fitch Ratings, Moody’s Investors Service and Standard and Poor’s have rated both the issues at ‘B+’, ‘B1’ and ‘B+’, respectively. The final order books stood at US $ 2.5 billion and US $ 3 billion for the five and 10-year issuances, respectively, with an oversubscription ratio of 3.6 times. The numbers remain impressive, given the high volatility seen in global capital markets in recent months.

HSBC Sri Lanka Head of Financial Institutions Group Shamindra Marcelline said, “This dual-tranche issuance is a landmark transaction and clearly reflects the continued confidence placed by the international investor community in the country’s strong credit story. This also demonstrates the strength of our longstanding partnership with the sovereign in navigating the current global financial uncertainties and challenges posed.”