SriLankan Airlinesachieve new benchmark rate with USD 175 millionbondwith the help of Standard Chartered Bank



24 June 2014, Colombo, Sri Lanka –SriLankan Airlines successfully priced a USD 175 million international bond issue on 23 June 2014, which was guaranteed by the Democratic Socialist Republic of Sri Lanka, due 2019 at a pricing of 5.3%. Standard CharteredBankhas continued to strengthen its partnership with Sri Lankan Airlines and was privileged to act 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.”
Yasantha Dissanayake, Head of Finance of SriLankan Airlines said “the response we received for this debut issue is indeed most encouraging and it opens up new avenues of financing for the Airline in the future when it focuses on re-fleeting and modernisation”.
Standard Chartered focuses on providing clients with the benefit of its local and global expertise to bring innovative and effective banking and finance solutions as it partners national development and expansion. This is the third foreign currency bond transaction from Sri Lanka this year and Standard Chartered is the only bank involved in all the three deals - testament to the strength of its Sri Lanka franchise and strong commitment to clients.
SriLankan Airlines is the flag carrier of Sri Lanka, with hubs located at Bandaranaike International Airport in Colombo and Mattala Rajapaksa International Airport, Hambantota. The Airlinewhich recently joined the oneworld alliance provides convenient connections to its global route network of 85destinations in 40countries in Europe, the Middle East, South Asia, Southeast Asia, the Far East, North America, Australia and Africa.