REG - Sri Lanka (Republic) - Holding Period Completion Announcement
28/02/2025 13:00
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RNS Number : 9201Y Sri Lanka (G.D.S. Republic of) 28 February 2025
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN OR INTO, OR TO ANY PERSON
LOCATED OR RESIDENT IN, ANY JURISDICTION WHERE IT IS UNLAWFUL TO RELEASE,
PUBLISH OR DISTRIBUTE THIS ANNOUNCEMENT OR THE INVITATION MEMORANDUM (AS
DEFINED BELOW).
Colombo, Sri Lanka, February 28, 2025
THE DEMOCRATIC SOCIALIST REPUBLIC OF SRI LANKA
NOTICE OF COMPLETION OF INTERNATIONAL HOLDING PERIOD ARRANGEMENT FOLLOWING SRI
LANKA'S CONSENT SOLICITATION AND INVITATION TO EXCHANGE (THE "INVITATION")
On November 25, 2024, the Government of the Democratic Socialist Republic of
Sri Lanka (the "Republic") launched the Invitation pursuant to an invitation
memorandum dated November 25, 2024 (the "Invitation Memorandum"). The
Invitation Memorandum is available on the Invitation Website (see below).
Terms used in this announcement but not defined herein have the respective
meanings given to them in the Invitation Memorandum.
On December 20, 2024, the Republic successfully settled the Exchange in
connection with all of the Republic's bonds covered by the Invitation (other
than the 2022 Bonds for which valid Instructions were not received and which
were not subject to mandatory exchange), all of which were subsequently
cancelled. On the same date, GLAS Trustees Limited (the "International Holding
Period Trustee") received the relevant proportion of the Exchange
Consideration (comprised of the Global Bonds Option) and, where applicable,
the relevant entitlements to the Exchange Fee Bonds, due to Holders of
Existing Bonds other than the 2022 Bonds that (a) failed to submit, or arrange
to have submitted on its behalf, a valid Instruction ("Non-Participating
Holders") at or prior to the Expiration Deadline or (b) specified that they
are Ineligible Holders in their Instructions ("Ineligible Holders"). Any
payments of principal and interest paid since the Settlement Date on the New
Eurobonds and Exchange Fee Bonds held by the International Holding Period
Trustee pursuant to the International Holding Period Arrangement were
distributed by the Republic to the International Holding Period Trustee.
On January 16, 2025 (the "First Distribution Date"), the Holding Period
Distribution Date following January 9, 2025 (the "International Holding Period
First Deadline Date"), Non-Participating Holders that submitted an
International Holding Period Instruction certifying their status as an
Eligible Holder and, if required, Settlement Account Details, prior to 5:00
p.m. (Eastern Standard Time) on the International Holding Period First
Deadline Date received, via the relevant Direct Participant, the Exchange
Consideration (comprised of the Global Bonds Option) to which such Eligible
Holder is entitled, together with any payments of interest or principal paid
on the relevant New Eurobonds since the Settlement Date and held by the
International Holding Period Trustee. A breakdown of these distributions is
set out in Tables A, B and C below.
On February 27, 2025 (the "Second Distribution Date"), the Holding Period
Distribution Date following February 18, 2025 (the "International Holding
Period Termination Date"), Non-Participating Holders that submitted an
International Holding Period Instruction certifying their status as an
Eligible Holder and, if required, their Settlement Account Details, following
the International Holding Period First Deadline Date but at or prior to 5:00
p.m. (Eastern Standard Time) on the International Holding Period Termination
Date received, via the relevant Direct Participant, the Exchange Consideration
(comprised of the Global Bonds Option) to which such Eligible Holder is
entitled, together with any payments of interest or principal paid on the
relevant New Eurobonds since the Settlement Date and held by the International
Holding Period Trustee. A breakdown of these distributions is set out in
Tables A, B and C below.
In respect of Ineligible Holders and Non-Participating Holders that failed to
submit a Holding Period Instruction certifying that they are Eligible Holders
and, if required, Settlement Account Details, at or prior to the International
Holding Period Termination Date, the New Eurobonds that such holders would
have otherwise received pursuant to the Exchange had they participated in the
Exchange and certified their eligibility, will be sold by the International
Holding Period Trustee in one or more transactions (each, a "Sale") as soon as
reasonably practicable following this announcement. The proceeds from the
Sales (net of the costs of sale including the fees of any marketing agent or
broker appointed in relation to the Sales and any taxes and provisions for tax
on sale or as a result of the Holding Period Arrangement, the "Net Cash
Proceeds"), together with the pro-rata distribution of the Accrued
Consideration and any payments of principal and interest paid on the relevant
New Eurobonds subject to such Sales since the Settlement Date and held by the
International Holding Period Trustee (collectively, the "Substitute
Consideration"), are expected to be distributed to relevant holders on the
final Holding Period Distribution Date, being the fifth Business Day following
the completion of all relevant Sales (the "Substitute Consideration
Distribution Date").
Relevant Ineligible Holders who had submitted a valid Instruction at or prior
to the Expiration Deadline, which was not validly revoked, will also receive
on the relevant Holding Period Distribution Date the redemption proceeds of
the applicable Exchange Fee Bond entitlement following its maturity.
Depending on market conditions, the volume of Exchange Consideration sold or
other developments, the Net Cash Proceeds may be less than the principal
amount of the Exchange Consideration otherwise due to such Holder. The
Republic will not be obligated to pay any amount other than, or additional to,
the Substitute Consideration, and payment of the Substitute Consideration will
fully and finally discharge the Republic's obligation to deliver Exchange
Consideration to the relevant holders of Existing Bonds.
None of the Republic, the International Holding Period Trustee or the
Information, Tabulation and Exchange Agent will be responsible for any errors,
delays in processing or systemic breakdowns or other failure in the delivery
of the relevant New Eurobonds by any Direct Participant in the Clearing System
and/or any other securities intermediary with respect to such Existing Bonds
to the Holder, and no additional amounts will be payable to the Holder in the
event of any delay in such delivery.
Table A - International Holding Period Distribution and Sale of New Eurobonds
Description ISIN/Common Code New Eurobonds Held by International Holding Period Trustee for International New Eurobonds Distributed to Eligible Holders on the New Eurobonds Distributed to Eligible Holders on the Expected New Eurobonds to be Sold for Substitute Consideration((*))
Holding Period
First Distribution Date Second Distribution Date
Step-Up Macro-Linked Bonds due 2030 Rule 144A: U.S.$71,059 U.S.$41,436 U.S.$0 U.S.$29,623
XS2966241528 / 296624152
Regulation S: U.S.$20,678,839 U.S.$8,222,231 U.S.$3,200,824 U.S.$9,255,784
XS2966241361 / 296624136
Total: U.S.$20,749,898 U.S.$8,263,667 U.S.$3,200,824 U.S.$9,285,407
Step-Up Macro-Linked Bonds due 2033 Rule 144A: U.S.$139,384 U.S.$81,276 U.S.$0 U.S.$58,108
XS2966241791 / 296624179
Regulation S: U.S.$40,561,190 U.S.$16,127,782 U.S.$6,278,364 U.S.$18,155,044
XS2966241445 / 296624144
Total: U.S.$40,700,574 U.S.$16,209,058 U.S.$6,278,364 U.S.$18,213,152
Step-Up Macro-Linked Bonds due 2036 Rule 144A: U.S.$65,318 U.S.$38,088 U.S.$0 U.S.$27,230
XS2966241874 / 296624187
Regulation S: U.S.$19,008,002 U.S.$7,557,887 U.S.$2,942,201 U.S.$8,507,914
XS2966241957 / 296624195
Total: U.S.$19,073,320 U.S.$7,595,975 U.S.$2,942,201 U.S.$8,535,144
Step-Up Macro-Linked Bonds due 2038 Rule 144A: U.S.$130,694 U.S.$76,208 U.S.$0 U.S.$54,486
XS2966242252 / 296624225
Regulation S: U.S.$38,031,979 U.S.$15,122,133 U.S.$5,886,876 U.S.$17,022,970
XS2966242096 / 296624209
Total: U.S.$38,162,673 U.S.$15,198,341 U.S.$5,886,876 U.S.$17,077,456
Step-Up Governance-Linked Bonds due 2035 Rule 144A: U.S.$94,118 U.S.$54,880 U.S.$0 U.S.$39,238
XS2966242336 / 296624233
Regulation S: U.S.$27,388,135 U.S.$10,889,970 U.S.$4,239,342 U.S.$12,258,823
XS2966242179 / 296624217
Total: U.S.$27,482,253 U.S.$10,944,850 U.S.$4,239,342 U.S.$12,298,061
4.00% PDI Bonds due 2028 Rule 144A: U.S.$89,697 U.S.$56,288 U.S.$0 U.S.$33,409
XS2966242419 / 296624241
Regulation S: U.S.$26,692,495 U.S.$10,553,857 U.S.$4,072,628 U.S.$12,066,010
XS2966242500 / 296624250
Total: U.S.$26,782,192 U.S.$10,610,145 U.S.$4,072,628 U.S.$12,099,419
____________
(*) For the avoidance of doubt, these amounts represent the amount of New
Eurobonds to be sold pursuant to the International Holding Period Arrangement
and not the amount of cash or Net Cash Proceeds to be distributed from the
Sale of such New Eurobonds. Such Net Cash Proceeds may be less than the
nominal value of the New Eurobonds due to market conditions and the volume of
New Eurobonds sold.
Table B - Distributions of Accrued Consideration
Description ISIN/Common Code Accrued Consideration per U.S.$1,000 of New Eurobonds
Step-Up Macro-Linked Bonds due 2030 Rule 144A: U.S.$9.04
XS2966241528 / 296624152
Regulation S: U.S.$9.04
XS2966241361 / 296624136
Step-Up Macro-Linked Bonds due 2033 Rule 144A: U.S.$15.35
XS2966241791 / 296624179
Regulation S: U.S.$15.35
XS2966241445 / 296624144
Step-Up Macro-Linked Bonds due 2036 Rule 144A: U.S.$22.50
XS2966241874 / 296624187
Regulation S: U.S.$22.50
XS2966241957 / 296624195
Step-Up Macro-Linked Bonds due 2038 Rule 144A: U.S.$13.50
XS2966242252 / 296624225
Regulation S: U.S.$13.50
XS2966242096 / 296624209
Step-Up Governance-Linked Bonds due 2035 Rule 144A: U.S.$25.50
XS2966242336 / 296624233
Regulation S: U.S.$25.50
XS2966242179 / 296624217
4.00% PDI Bonds due 2028 Rule 144A: U.S.$84.89((*))
XS2966242419 / 296624241
Regulation S: U.S.$84.89((*))
XS2966242500 / 296624250
____________
(*) With regards to the PDI Bonds, such amount equals U.S.$21.67 per
U.S.$1,000 of nominal amount of PDI Bond as Accrued Consideration plus the
First PDI Amortization Amount, being an amount equal to approximately
U.S.$63.22 per U.S.$1,000 of nominal amount of PDI Bonds following the
deduction of the Committees' Expenses Shortfall (which totalled approximately
U.S.$6.78 per U.S.$1,000 of nominal amount of PDI Bonds).
Table C - Global Bonds Option
The following table set outs the nominal amounts of New Eurobonds issued and
exchanged for Existing Bonds, including those New Eurobonds distributed to the
International Holding Period Trustee on behalf of Non-Participating Holders
and Ineligible Holders pursuant to the International Holding Period
Arrangement.
Global Bonds Option - Exchange Consideration (U.S.$)((2))
Existing Bond ISIN Principal Amount Outstanding((1)) 2030 Macro 2033 Macro 2036 Macro 2038 Macro Governance PDI Bonds Total
Linked Bonds
Linked Bonds
Linked Bonds
Linked Bonds
Linked Bonds
Consideration
2023 Bonds US85227SAV88 / USY8137FAK40 $1,250,000,000 $103.59 $203.19 $95.22 $190.52 $137.20 $126.66 $856.38
March 2024 Bonds US85227SAY28 / USY8137FAN88 $1,000,000,000 $103.59 $203.19 $95.22 $190.52 $137.20 $123.11 $852.83
June 2024 Bonds US85227SBA33 / USY8137FAQ10 $500,000,000 $103.59 $203.19 $95.22 $190.52 $137.20 $127.53 $857.25
2027 Bonds US85227SAT33 / USY8137FAH11 $1,500,000,000 $103.59 $203.19 $95.22 $190.52 $137.20 $132.61 $862.33
2028 Bonds US85227SAW61 / USY8137FAL23 $1,250,000,000 $103.59 $203.19 $95.22 $190.52 $137.20 $148.69 $878.41
2029 Bonds US85227SAZ92 / USY8137FAP37 $1,400,000,000 $103.59 $203.19 $95.22 $190.52 $137.20 $141.08 $870.80
2030 Bonds US85227SBB16 / USY8137FAR92 $1,500,000,000 $103.59 $203.19 $95.22 $190.52 $137.20 $132.75 $862.47
June 2025 Bonds US85227SAN62 / USY8137FAC24 $650,000,000 $103.59 $203.19 $95.22 $190.52 $137.20 $127.26 $856.98
November 2025 Bonds US85227SAQ93 / USY8137FAE89 $1,500,000,000 $103.59 $203.19 $95.22 $190.52 $137.20 $148.04 $877.76
2026 Bonds US85227SAR76 / USY8137FAF54 $1,000,000,000 $103.59 $203.19 $95.22 $190.52 $137.20 $133.28 $863.00
____________
((1)) As of the date of this announcement. The term "Outstanding" for
each Series of Existing Bonds has the meaning ascribed to it in the applicable
Existing Indenture.
((2)) Principal amount of New Securities per U.S.$1,000 principal amount
of Existing Bonds. The aggregate nominal amount of New Securities to be
received pursuant to each Instruction will be rounded down to the nearest
U.S.$1. For the avoidance of doubt, no cash will be paid for fractional
entitlements.
This announcement is made by Sri Lanka and constitutes a public disclosure of
inside information under Regulation (EU) 596/2014 as it forms part of domestic
law of the United Kingdom by virtue of the European Union (Withdrawal) Act
2018.
Any questions regarding the terms of the Invitation may be directed to the
Dealer Manager and questions regarding settlement should be directed to the
Information, Tabulation and Exchange Agent. The contact details for each are
specified below:
Dealer Manager
Citigroup Global Markets Inc
388 Greenwich Street
New York, New York 10013
United States
Telephone: +1 212 723 6106 (in New York)
+91 22 6175 9707 (in Asia)
Email: gosl.invitation@citi.com (mailto:gosl.invitation@citi.com)
Information, Tabulation and Exchange Agent
Sodali & Co
In London: In Stamford: In Hong Kong:
The Leadenhall Building, 122 Leadenhall Street London, EC3V 4AB 333 Ludlow Street, 5th Floor South Tower, CT 06902 29/F, No. 28 Stanley Street Central, Hong Kong
United Kingdom United States of America
Telephone: +44 20 4513 6933 Telephone: +1 203 658 9457 Telephone: +852 2319 4130
Email: srilanka@investor.sodali.com
Invitation Website: https://projects.sodali.com/srilanka
(https://projects.sodali.com/srilanka)
Disclaimer
This announcement must be read in conjunction with the Invitation Memorandum.
No offer or invitation to acquire or sell any securities is being made
pursuant to this announcement. The Dealer Manager does not take responsibility
for the contents of this announcement.
Neither the Invitations nor the New Securities or the Exchange Fee Bonds have
been, and will not be, registered under the U.S. Securities Act of 1933, as
amended (the "Securities Act"), or the securities laws of any other
jurisdiction. Unless they are registered under the Securities Act, the New
Securities and the Exchange Fee Bonds may be offered only in transactions that
are exempt from registration under the Securities Act. Accordingly, the
Invitations to Exchange were directed only to Holders of Existing Bonds that
are: (i) "qualified institutional buyers" as defined in Rule 144A under the
Securities Act ("QIBs"), or (ii) non-U.S. persons outside the United States
who (y) if located within a member state of the EEA or the UK, is a "qualified
investor" as defined in Regulation (EU) No 2017/1129, as amended or Regulation
(EU) No 2017/1129 as it forms part of domestic law of the UK by virtue of the
European Union (Withdrawal) Act 2018, respectively, or a duly designated proxy
thereof, and (z) if outside the EEA and the UK, eligible to receive the
Invitation under the laws of its jurisdiction an in reliance on Regulation S
under the Securities Act (each, an "Eligible Holder").
European Economic Area
The New Securities and the Exchange Fee Bonds are not intended to be offered,
sold or otherwise made available to and should not be offered, sold or
otherwise made available to any retail investor in the EEA. For these
purposes, a "retail investor" means a person who is one (or more) of: (i) a
retail client as defined in point (11) of Article 4(1) of Directive 2014/65/EU
(as amended, "MiFID II"); (ii) a customer within the meaning of Directive (EU)
2016/97 (as amended, the "Insurance Distribution Directive"), where that
customer would not qualify as a professional client as defined in point (10)
of Article 4(1) of MiFID II; or (iii) not a qualified investor as defined in
the EU Prospectus Regulation. Consequently, no key information document
required by Regulation (EU) No 1286/2014 (as amended, the "PRIIPs Regulation")
for offering or selling the New Securities or the Exchange Fee Bonds or
otherwise making them available to retail investors in a Member State has been
prepared and therefore offering or selling the New Securities or the Exchange
Fee Bonds or otherwise making them available to any retail investor in a
Member State may be unlawful under the PRIIPs Regulation.
United Kingdom
This announcement is for distribution only to persons who (i) have
professional experience in matters relating to investments falling within
Article 19(5) of the Financial Services and Markets Act 2000 (Financial
Promotion) Order 2005 (as amended, the "Financial Promotion Order"), (ii) are
persons falling within Article 49(2)(a) to (d) ("high net worth companies,
unincorporated associations etc.") of the Financial Promotion Order, (iii) are
outside the United Kingdom or (iv) are persons to whom an invitation or
inducement to engage in investment activity (within the meaning of section 21
of the FSMA) in connection with the issue or sale of any New Securities may
otherwise lawfully be communicated or caused to be communicated (all such
persons together being referred to as "Relevant Persons"). This announcement
is directed only at Relevant Persons and must not be acted on or relied on by
persons who are not Relevant Persons. Any investment or investment activity to
which the Invitation Memorandum relates is permitted only by Relevant Persons
and will be engaged in only with Relevant Persons.
The New Securities and the Exchange Fee Bonds are not intended to be offered,
sold or otherwise made available to and should not be offered, sold or
otherwise made available to any retail investor in the UK. For these purposes,
a "retail investor" means a person who is one (or more) of: (i) a retail
client, as defined in point (8) of Article 2 of the UK Prospectus Regulation;
(ii) a customer within the meaning of the provisions of the Financial Services
and Markets Act 2000, as amended (the "FSMA") and any rules or regulations
made under the FSMA to implement the Insurance Distribution Directive, where
that customer would not qualify as a professional client, as defined in point
(8) of Article 2(1) of the UK Prospectus Regulation; or (iii) not a qualified
investor as defined in the UK Prospectus Regulation. Consequently no key
information document required by document required by Regulation (EU) No
1286/2014 as it forms part of domestic law by virtue of the EUWA (the "UK
PRIIPs Regulation") for offering or selling the New Securities or the Exchange
Fee Bonds or otherwise making them available to retail investors in the UK has
been prepared and therefore offering or selling the New Securities or the
Exchange Fee Bonds or otherwise making them available to any retail investor
in the UK may be unlawful under the UK PRIIPs Regulation.
Italy
None of the Invitation Memorandum or any other document or materials relating
to the Invitation (including this announcement) have been or will be submitted
to the clearance procedures of the Commissione Nazionale per le Società e la
Borsa ("CONSOB") pursuant to Italian laws and regulations.
The Invitation is being carried out in the Republic of Italy ("Italy") as an
exempted offer pursuant to article 101-bis, paragraph 3-bis of the Legislative
Decree No. 58 of 24 February 1998, as amended (the "Financial Services Act")
and article 35-bis, paragraph 3 of CONSOB Regulation No. 11971 of 14 May 1999,
as amended. Accordingly, Holders of the Existing Bonds that are located in
Italy can tender Existing Bonds for exchange pursuant to the Invitations
through authorised persons (such as investment firms, banks or financial
intermediaries permitted to conduct such activities in Italy in accordance
with the Financial Services Act, CONSOB Regulation No. 20307 of 15 February
2018, as amended from time to time, and Legislative Decree No. 385 of 1
September 1993, as amended from time to time) and in compliance with
applicable laws and regulations or with requirements imposed by CONSOB, Bank
of Italy or any other Italian authority.
Each intermediary must comply with the applicable laws and regulations
concerning information duties vis-à-vis its clients in connection with the
Existing Bonds or the Invitation.
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