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Sri Lanka sees ‘extremely good’ response for syndicated loan: Finance Minister

ECONOMYNEXT – Sri Lanka has seen an ‘extremely good response’ for a syndicated loan that is currently being arranged, which may result in better pricing that last year, Finance Minister Ravi Karunanayake said.

"Compared to the previous syndicated loan, the response is extremely good," he told reporters in Colombo. "I am happy with the response that is coming in."

Karunanayake said interest shown in the bond came with some volatility in external conditions and a possible rate hike by the US Federal Reserve.

Fitch Ratings had just upgraded Sri Lanka’s credit outlook on its ‘B+’ rating to ‘stable’ from ‘negative’, citing improving tax revenues.

"As a result, even if the external word has gone in a different direction, we are heading towards financial discipline," Karunanayake said.

He said the market had recognised the changes and he was hoping for better rates than last year.

International capital market sources say any Fed rate hike would be priced into the loan and there were funds looking to lock in rates at the moment.

If Sri Lanka is not too tight with the rates, it could even raise a billion rupees, sources said. If rates are tight, about $500 million was possible.

Last year, Sri Lanka raised $400 million from a syndicated loan.

Sri Lanka is also planning a $1.5 billion sovereign bond. (Colombo/Feb17/2017)





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