Colombo, Sri Lanka, October 13, 2021—In a major step towards supporting the private sector in Sri Lanka amid a significant economic downturn, IFC issued its first-ever rupee-denominated bond in the country.
The bond – called the 'Serendib Bond' – is a significant milestone towards ensuring that the private-sector has access to long-term offshore financing in local currency—while hedging foreign exchange risks—at a critical time.
The involvement of triple A rated issuer such as IFC in introducing Sri Lankan rupee to the international capital markets will help create a benchmark for future rupee issuance, and provide offshore investors the ability to gain exposure to the currency.
"IFC's first rupee-denominated bond in Sri Lanka comes at a critical time – in the midst of the COVID-19 pandemic – and will be significant in contributing to the development of a more resilient, efficient and inclusive financial sector," said Hector Gomez Ang, Regional Director for South Asia at IFC. "With this landmark transaction, we aim to encourage private sector to invest in the future of the country, paving the way for job creation and inclusive and sustainable growth."
Proceeds from IFC's $5 million equivalent bond will finance Sunshine Consumer Lanka Ltd, a subsidiary of Sunshine Holdings PLC. The investment will support the domestic confectionary supply chain and help strengthen the overall competitiveness of the country's fast-moving consumer goods (FMCG) sector.
"IFC's partnership will allow us grow further through diversification of our businesses and expand our presence in the consumer goods sector," said Vish Govindasamy, Group Managing Director of Sunshine Holdings PLC. "We are also happy to be a part of IFC's first Serendib Bond – which protects our business from exchange rate volatility as well as any increase in interest rates, while giving us access to foreign credit markets to grow the business."
This project is a classic example of IFC's strategy of developing the bond market and making international financing available.
In November 2019, IFC issued first-ever inaugural Taka Bangla Bond in London Stock Exchange—raising the international profile of Bangladeshi currency Taka.
IFC has been an important issuer of capital market instruments in local currencies, an issuer of green and other labeled bonds, and has supported clients in accessing the capital markets as an anchor investor in new issuances that helps to bridge the financing gap in emerging markets.
IFC has issued bonds in about 80 local emerging market currencies – from Armenian dram to Uzbek som and Zambian kwacha.
About IFC
IFC—a member of the World Bank Group—is the largest global development institution focused on the private sector in emerging markets. We work in more than 100 countries, using our capital, expertise, and influence to create markets and opportunities in developing countries. In fiscal year 2020, we invested $22 billion in private companies and financial institutions in developing countries, leveraging the power of the private sector to end extreme poverty and boost shared prosperity. For more information, visit www.ifc.org.
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