A&O advises on landmark Sri Lanka bond
Allen & Overy has advised the Bank of Ceylon on its $500 million dollar bond, Sri Lanka's first non-sovereign debt offering since 2004.
The state-owned commercial bank priced the bond at par to yield 6.875 percent, having attracted investor orders worth $3.86 billion from 215 accounts, said Dow Jones Newswires, adding that allocation was split almost evenly between Asian, European and U.S. investors, with fund managers taking 88 percent of the offering.
Citigroup Global Markets Inc, the Hong Kong and Shanghai Banking Corp Ltd and Merrill Lynch International acted as joint lead managers and joint bookrunners.
The last previous corporate dollar bond out of Sri Lanka was Sri Lanka Telecom’s $100 million offering in November 2004, according to Dow Jones Newswires, with the last international debt deal being a $1 billion ten-year dollar bond by the sovereign last July.
Allen & Overy acted as international counsel to the issuers, with Nithya Partners acting as the Sri Lankan counsel. The underwriters were represented by Davis Polk & Wardwell on internationak law, and Julius and Creasy on Sri Lankan law.
The A&O team comprised partner David Johnson, counsel Desirée Sumilang and associates Garrick Merlo and Emily Dong. Partner Jack Heinberg and associate Brian Schultz provided U.S. tax advice, and partner Kenneth Rivlin provided economic sanctions and regulatory advice.
"Despite the uncertainties in the global market, the successful closing of this transaction is a reflection of international investor confidence in Sri Lanka,” said Johnson in a statement. “We are thrilled to have been involved in this debut issuance by the Bank of Ceylon and are honoured to have had the opportunity to work with the leading commercial bank.”
The state-owned Bank of Ceylon is the leading commercial bank in Sri Lanka by total assets, number of branches and ATM network size.
A&O acts on $250 mln VietinBank debt offering
Allen & Overy has advised VietinBank, Vietnam's largest partly private lender, on its first overseas bond issue this year, which raised $250 million and provided a test of investors' appetite for the country's debt.
VietinBank, or Vietnam Joint Stock Commercial Bank for Industry and Trade, plans to raise $2 billion this year and had initially aimed at $500 million in the first tranche, Reuters reported, but the Hanoi-based lender reduced the debt offer by half with an annual coupon of around 8 percent and sold it in Europe, Asia and the United States.
Barclays Bank PLC and the Hong Kong and Shanghai Banking Corporation Limited acted as joint lead managers and joint bookrunners.
Foreign interest in Vietnamese debt has been weak since the late 2010 default by state-owned Vietnam Shipbuilding Industry Group, or Vinashin, on a $600 million syndicated loan, Reuters added, noting that Vietnam's credit ratings were downgraded last year by Moody's, Fitch and Standard and Poor's, potentially raising the cost of capital for its companies.
In March Vincom Joint Stock Co, Vietnam's leading real estate developer, raised $185 million via five-year dollar bonds, at an annual coupon of 5 percent, and another bank, Vietcombank, which is the country's fourth-largest lender by assets, plans to sell $1 billion worth of bonds in international markets, its chairman said in late March.
Allen & Overy had previously acted for the Vietnamese government on its last international bond issuance in 2010. The team advising VientinBank comprised partner David Johnson, counsel Desirée Sumilang, and associates Garrick Merlo and Emily Dong, with partner Jack Heinberg and associate Brian Schultz provided US tax advice. Milbank advised the underwriters on international law, and YKVN on local law, while Mayer Brown JSM acted as Vietnamese counsel to VientinBank. ALB
Ranajit Dam is Southeast Asia Editor at ALB. Follow him on Twitter: @RanajitDam_ALB