Six-bank group to win mandate on Sri Lanka’s loan of $ 1 b

Tuesday, 28 February 2017 00:15 - - {{hitsCtrl.values.hits}}

Reuters: A six-bank group is tipped to win the mandate on the Sri Lankan Government’s loan of up to $ 1 billion, although lenders from a competing group could be added to the deal, sources said.

Bank of Baroda, Deutsche Bank, Indian Bank, Qatar National Bank, State Bank of India and Sumitomo Mitsui Banking Corporation are strong favourites to win the mandate.

The proposed pricing is lower than the 300bp all-in Sri Lanka paid on its largest loan completed in September. A competing seven-bank group submitted a proposal of around 300bp all-in for a slightly bigger size of $ 550 million-$ 600 million, the sources said.

Sources said the sovereign could bring the two groups together eventually to achieve its intended $ 1 billion borrowing size, which the Government’s Cabinet has approved already.

The loan is expected to carry a door-to-door tenor of three years with amortisation.

The sovereign had sent out a request for proposals for the borrowing last month with a 20 January deadline for responses.

If it achieves the intended size, the latest foray will be the South Asian sovereign’s largest loan. It follows an overwhelming response to its borrowing in September when Sri Lanka, returning to the loan markets after eight years, increased its three-year borrowing to $ 700 million from a targeted size of $ 500 million.