Sri Lanka

The Sri Lankan government is making a comeback to the bond market, launching a dual-tranche dollar transaction on Monday morning.

The Sri Lankan sovereign has finally hit the loan market for a $300m borrowing — a good three months after news emerged of a potential mandate and about a year after it issued a request for proposals. But the country is on much stronger footing now despite a ratings downgrade earlier this year, writes Shruti Chaturvedi.

Sri Lanka’s finance minister, who has helped engineer a growth recovery, tells Emerging Markets that he is fed up with “pontificating” Western politicians telling him to adopt green policies that would end up adding costs for his citizens

Sri Lanka needs to overcome China-phobia by convincing people that it can develop a relationship with its larger neighbour that is now seen as over-reliant.

The Sri Lankan government is readying itself for an international bond, having sent out a request for proposals on Tuesday.

A recent succession of frontier market sovereign loans have given banks an opportunity to build relationships with these countries. Outwardly, some lenders may find it hard to stomach Mongolia, Pakistan and Sri Lanka risk. But a more nuanced view is needed. Getting in early will allow banks to be part of their development story.

Pakistan and Sri Lanka have approached the loan market for their latest fundraisings. While interest in the former has been steadily rising, the latter was recently hit by a rating downgrade.

Four banks are favourites to win the mandate for a $500m borrowing by the Democratic Socialist Republic of Sri Lanka, which sent out a request for proposals for the loan in June last year.

The Democratic Socialist Republic of Sri Lanka is mulling a return to the international bond market as it needs to raise $11bn in 2016.

Bank of Ceylon has decided to pull a $100m loan launched at the end of October 2015 in favour of raising more short-term funding.

Sri Lanka’s Commercial Leasing & Finance (CLC) has raised one portion of a $153m syndicated loan from 10 lenders, as the non-banking financial institution sets it sights on developing small and medium enterprises in the country.

Sri Lankan conglomerate John Keells has finally signed its $395m resort financing that spent nearly a year in syndication. The facility was delayed after the country’s new government changed rules on casino licences, which meant banks had to rethink the loan to take into account the absence of casino revenues.