Citi Bank partners with govt to raise USD 1.5 b

Dual-tranche international sovereign offering:

Citi Bank partnered with the Central Bank of Sri Lanka on behalf of the government to raise US $ 1.5 billion in a dual-tranche 5.5- and 10-year bond offering, a bank statement said.

The Notes were priced at a coupon and re-offer yield of 5.750% and 6.825% for the 5.5-year and 10-year tranche, respectively. The 5.5-year and 10-year tranche were priced well inside the respective initial price guidance of 6.125% area and 7.125% area.

Driven by high quality institutional accounts globally, the 5.5-year and 10-year tranche attracted orders from over 200 accounts. The 5.5-year tranche saw allocations of 35% to the US, 37% to Europe, and the remaining 28% to Asia. By investor type, the split was 85% to fund managers, 8% to insurance and pension funds, 3% to banks, and 4% to private banks.

The 10-year tranche saw allocations of 62% to the US, 28% to Europe, and the remaining 10% to Asia. By investor type, the split was 91% to fund managers, 7% to insurance and pension funds, 2% to banks and private banks.

The bonds have been rated 'B1', 'B+' and 'B+' by Moody's Investors Service Standard and Poor's and Fitch Ratings respectively. This marks the country's tenth US dollar benchmark offering in the international bond markets since 2007.

Citi Country Officer for Sri Lanka, Ravin Basnayake said: "The global investor support for this transaction underlines the strong confidence investors have in Sri Lanka's credit story. We are proud to have again supported the country in creating this new benchmark in the international capital markets".

Citi Markets Head, Saneth Gamage said, "Given the conditions prevailing in global markets, investor appetite towards this issuance was commendable.

The order book saw overwhelming support globally with one of the biggest order books we have seen for the country in recent years - US$2.5 billion and US$3.0 billion respectively for the individual tranches and more than 400 investors in total."

This landmark transaction represents the country's return to the US dollar bond markets and Citi acted as Joint Lead Manager, Joint Bookrunner and Ratings advisor reflecting Citi's global abilities, dominant market position and global network presence.