Sri Lanka to float $500 million syndicated loan

ECONOMYNEXT – Sri Lanka is planning to float a $500 million syndicated loan shortly, which will be arranged by at least four banks, a media report said.

Bloomberg Newswires said Citi, Emirates NBD, HSBC and Mashreq Bank are expected to be mandated shortly to arrange a three-year term loan that will be repaid in instalments, citing sources close to the deal.

Sri Lanka has struck a preliminary deal with the International Monetary Fund, which is expected to come into effect in June after some essential prior actions that are needed to make sure that the program is not derailed at the start.

Central Bank Governor Arjuna Mahendran had also said that Sri Lanka wanted to go the market with a $1.5 billion sovereign bond armed with an IMF deal when yields of existing bonds fall below 7.0 percent.

Sri Lanka’s 2022 bond with a coupon of 5.585 percent was quoted around 6.6/6.7 percent, and its 2025 bond with a coupon of 6.6859 was quoted around 7.20/30 percent this week.

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