SLA Achieve New Benchmark Rate With USD 175m Bond With Standard Chartered Bank

SriLankan Airlines successfully priced a USD 175 million international bond issue on 23 June 2014, which was guaranteed by the government of Sri Lanka, due 2019 at a pricing of 5.3%. 

Standard Chartered Bank has acted as the sole book runner for thishighly successful and inaugural international bond issue of the airline. 

This is the lowest rate achieved to date,in the international market, by a Sri Lankan corporate or bank. The proceeds from the bond will help support the carrier’s re-fleetingand working capital requirements.

Colin Pawley, Head of Corporate and Institutional Clients, Standard Chartered commenting on the bond issue said: “Standard Chartered is proud to support the development of the national carrier and in turn the economy. This setsa new benchmark for Sri Lankan issuers and has paved the way for other entities to tap the international capital markets Our on the ground presence linked to our international capabilities really helped to ensure this issue was a great success”.

The strong anchor interest and support from investors followed a highly successful international road show that covered Singapore, Hong Kong and London andmeant SriLankan Airlines was able to price the USD transaction at a very competitive rate despite a modest size issuance. The orderbook witnessed exceptionally good interest from institutional investors. The final orderbook was USD 3.0 billion from 85 participants and was oversubscribed by a record 17.0x.

Kapila Chandrasena, CEO, SriLankan Airlines stated “we are very pleased with the interest shown by international investors in the Airline and equally important is the fact that this amply depicts the confidence that the investing community has in the Country”.

 

Dushan Casie Chetty, Director, Head Local & Global Corporates, Standard Chartered who accompanied senior SriLankan management on the road show stated “SriLankan Airlines was able to leverage on the strong rallyGoSL outstanding bonds had witnessed since they were priced earlier this year to garner strong investor interest and price the transaction at a tight premium of 50 bps over the fair value of a new 5 year issuance by the sovereign.Once again we are privileged to support SriLankan Airlines with whom we have had a long history of association,and as an international bank we believe we are well positioned to provide such services to the airline as it aims to realise growth prospects.”

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