HSBC largest arranger of $100m loan to Lanka

HSBC acted as an arranger and the single largest lender under a syndicated $ 100 million equivalent loan to the Sri Lanka Government.

The facility is to fund a tertiary education programme aimed at improving the quality of education in order to narrow the gap between educational attainment and labour market requirements. This is the first ever Overseas United Loan Insurance facility to be supported by the Japanese governmental agency, Nippon Export and Investment Insurance (NEXI), that has been extended to the Government of Sri Lanka.

Commenting on the syndicated loan, Mark Humble, the Chief Executive Officer of HSBC Sri Lanka commented that developing the nation’s human capital through a sound education programme was one of the key factors for achieving a superior level of economic growth. "The funding was in the form of a five-year loan and the interest cost for the Government was significantly below 200 basis points plus LIBOR."

"We have a 111 year history in this country, throughout which we have played an active role in supporting projects that are key to the development of the country." Humble said. "For instance, in June this year, HSBC raised the equivalent of approximately US$ 33 million for the Ministry of Rehabilitation, Resettlement and Refugees for the redevelopment of infrastructure in the northern and eastern provinces.

Two separate facilities were provided, offering a loan horizon of up to 13 1/2 years making this the longest tenor offered to the Government of Sri Lanka."

In another landmark transaction HSBC undertook the role of lead arranger and lender syndicating a loan facility of US$ 107 million for a leading State owned bank. "Twenty per cent of the funds syndicated were from HSBC" Humble added.