The airline sold the 5-year bonds at 5.3 percent, with an explicit government guarantee, 175 basis points higher than the 5.125 percent the government itself paid for a 500 million US dollar sovereign bond in April.
Dushan Casie Chetty, Director, Head Local & Global Corporates, Standard Chartered said it was price at only 50 basis points higher than the current 'fair value' of 5-year sovereign bonds.
"This sets a new benchmark for Sri Lankan issuers and has paved the way for other entities to tap the international capital markets," Colin Pawley, Head of Corporate and Institutional Clients, Standard Chartered said.
The government however has been unwilling to guarantee debt of other issuers, encouraging them to go to the market on the strength of their own balance sheet.The funds will be used for working capital and re-fleeting. SriLankan Airlines is making losses.
Yasantha Dissanayake, Head of Finance of SriLankan Airlines said the response to the debt issue was encouraging and it opened new sources of financing for the airlines for refleeting and modernization.