COLOMBO: Sri Lanka has appointed seven lead managers for a sovereign bond worth up to $1.5 billion and could tap the capital market as soon as next month, a source close to the deal said on Thursday. Finance Minister Ravi Karunanayake said the government was looking to issue a bond with a term of more than 15 years. The banks are Citigroup <C.N>, Deutsche Bank <DBKGn.DE>, HSBC <HSBA.L>, Standard Chartered Bank <STAN.L>, Morgan Stanley <MS.N> and two Chinese institutions, the source, who has direct knowledge of the deal, told Reuters.
A government source who also has knowledge of the deal confirmed the seven banks. Karunanayake also said inflows from the bond, another $1 billion from two syndicated loans, and $500 million from Sri Lanka Development Bonds would be used to boost foreign reserves. “We expect see a double-digit (billion dollar) reserves this year with the flows from asset leasing and some divestment from state assets,” Karunanayake told reporters. Sri Lanka’s foreign exchange reserves were at $5.6 billion by end-March compared to $6 billion at the end of last year. Sri Lanka missed the reserves target set under the terms of a $1.5 billionInternational Monetary Fund loan. The IMF last month urged Sri Lanka’s central bank to rebuild foreign reserves while maintaining exchange rate flexibility.
