Global banking giant HSBC says Sri Lanka’s more than seven times oversubscribed US$ 1 billion sovereign bond issue was an exceptional achievement given the environment prevailing in global capital markets.
"The final book stood in excess of $7.5 billion of orders from 315 accounts, which is an exceptional achievement for Sri Lanka given the volatile market backdrop," HSBC Sri Lanka said in a statement issued on Monday (1).
HSBC acted as joint lead manager, book-runner and sovereign rating adviser on the Democratic Socialist Republic of Sri Lanka US$ 1 billion 10 year 144A/Reg.S bond offering. Being the only bank with a local presence, the latest bond issue comes in the wake of the bank winning all of the three previous bond mandates by the government of Sri Lanka with its inaugural issue in 2007, followed by issues in 2009 and 2010.
Lakshan Goonetilleke, Senior Investment Banking and Financial Institutions Group Manager, stated, "The demand represents a strong vote of confidence from international investors in the progress made in Sri Lanka and it’s excellent economic prospects. Execution was intra-day, minimising market risk for the issuer. Pricing with a 6.25 percent yield at the tight end of revised guidance, with negligible new issue concession, reflecting the strong order book and positive growth story of Sri Lanka."
The deal appealed to the US emerging market and global funds, which saw rarity value in the deal. Sri Lanka tapped the market just 10 months ago, but has fewer outstanding bonds than Indonesia and the Philippines, the bank said.
"Sri Lanka also received a vote of confidence from the rating agencies. Fitch upgraded its rating on Sri Lanka to BB- from B+ on July 18, citing the country’s stabilisation and economic recovery under the IMF programme, as well as its efforts to address its budget deficit. Moody’s and S&P both revised their outlooks on Sri Lanka to positive but kept their ratings at B1 and B+ respectively," it said.
Nick Nicolaou, Chief Executive Officer for HSBC Sri Lanka and Maldives said, "HSBC has the strongest Debt Capital Market capabilities in Asia and this bond issue stands testament to the ability we have in closing large financial deals. We will continue to support the Government in this space, as well as the Corporate sector in various infrastructure development projects, in line with national priorities."
Royal Bank of Scotland, Bank of America Merrill Lynch and Barclays Capital PLC were joint lead managers to the issue along with HSBC while state banking giant Bank of Ceylon co-managed the issue.
HSBC to cut 30,000 jobs worldwide, sell almost half of its US branches
LONDON (AP) — British banking company HSBC said Monday it will cut 30,000 jobs worldwide by 2013 and sell almost half its bank branches in the U.S., part of a new strategy to cut back on retail operations in some parts of the world and focus instead on fast-growing emerging markets.
The bank, which reported a 3 percent increase in pretax profits to $11.5 billion in the six months to June, has already cut 5,000 jobs this year.
Bank spokesman Patrick Humphris said another 25,000 will be slashed by 2013. HSBC currently employs around 296,000 people worldwide.
Humphris declined to give details of where the job cuts would be but said the group is still hiring in emerging economies such as Brazil and Mexico.
As part of its restructuring, HSBC will sell 195 retail banking branches in the United States to First Niagara Bank for around $1 billion. Most of the branches to be sold are in upstate New York, while six are in Connecticut. Four more are northern Westchester County, and two in Putnam County.
The bank is still dealing with the legacy of bad loans in the U.S. from the 2003 acquisition of consumer lender Household International Inc. The acquisition made HSBC the biggest subprime lender in the United States at the time, which resulted in billions of losses to HSBC leading up to the financial crisis of 2008.
"I am pleased with there results, which mark a first step in the right direction on what will be a long journey," New chief executive Stuart Gulliver said in a statement.
The bank also increased its dividend by 12.5 percent to 18 cents per share.
News of the bank’s overhaul and its profit — earnings per share rose to 51 cents in the first half from 38 cents a year earlier, allowing for a 12.5 percent divident increase to 18 cents — boosted the company’s share price.
By mid morning in London, shares in HSBC Holdings PLC were up 4.4 percent at 620.80 pence (10.19).
source - www.island.lk
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