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Achievements

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NSB Successfully issued USD 250 million 5 year Bond

National Savings Bank made a stellar return to the international financial market on 2nd September, 2014 with a USD 250mn bond offering. The 5 year bond was priced at 5.15%, much lower than the 8.875% yield achieved on the Bank's debut issue of the same tenor last year. This is a significant milestone for the Bank, having achieved the lowest yield by a Sri Lankan issuer (outside of the sovereign itself).

The open price guidance was at 5.5% area and books were covered within an hour and were more than five times covered after the lunch time in Asia. The pent-up investor demand drove momentum starting in Asia, leading into Europe and finally the US. The overwhelming response from investors saw the orderbook build up approximately USD 1.8 billion when books went in Europe market representing 7 times oversubscription, enabling a final price guidance of 5.20% + /- 5bps to be announced. The books continued to grow in the US to a final size of USD 2.1 billion. NSB was ultimately able to price at a yield of 5.15%, representing a 35bps tightening vs initial price guidance of 5.5% area, and final pricing was well inside the Bank's own USD secondary curve.


The USD 7.6 billion bonds issued in the Dollar market in Asia on the same day as NSB did little to detract attention away from the Bank's issue and offering was still more than eight times oversubscribed. Oversubscription of 8.5 times is clearly an indication of the credit credential of NSB.


Investors of the Bond are split across Asia -37%, Europe -29% and the US-34% and 80 percent of the issue had been bought by fund managers, private banks 11%, banks 8% and insurers took the rest. In September last year the Bank launched its debut international bond issue and raised USD 750 million, the highest amount of foreign funds raised in a single issue by a Sri Lankan bank thus far from foreign investors.


NSB was awarded " Best Deal " from FinanceAsia for its successful International Bond Issue.


International and local credit rating of the Bank reaffirmed

Our Bank, the premier savings Bank of Sri Lanka has been reaffirmed with BB- Stable International Credit Rating by Fitch Ratings, one of the largest credit rating agencies operating worldwide. Fitch Ratings has also awarded the BB-(EXP) for the Bank's second US Dollar denominated Bond Issue which was launched on 2nd September, 2014 to raise USD 250 million.


These ratings further strengthen the Bank's Local Credit Rating of AAA by Fitch Ratings, maintained for 12 consecutive years.


The International Credit Ratings thus been given are on par with Sri Lankan Government's International Credit Rating which reflects the Rating Agency's expectations of the Government 's high propensity to provide support, in case of need, to the Bank. The state's high propensity to support the Bank stems from its full state ownership, explicit guarantee as provided by the NSB Act for deposits,systemic importance and its policy mandate of mobilizing retail savings and investing them in government securities.


A credit rating, determined by credit rating agencies, evaluates the credit worthiness of a debtor, especially a company or government. It is an evaluation of the debtor's ability to pay back the debt and the likelihood of default.

     
   
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