Capital raising advisory in Sri Lanka

TSW Capital has closed 22 transactions in Sri Lanka. Most share a structure: a Sri Lankan licensed bank, registered finance company or microfinance lender that needs foreign currency or long-tenor funding, and a development finance institution, impact debt fund or offshore commercial lender prepared to provide it. We run that process from lender mapping through term sheet to disbursement.

DFI funding for Sri Lankan banks and NBFIs

Thirteen of our Sri Lankan mandates have been for licensed banks and five for registered finance companies and NBFIs. The instruments run from plain senior term loans through to subordinated debt structured to qualify as regulatory capital.

Facilities we have arranged include a USD 30Mn term loan, a USD 15Mn senior debt facility for an NBFI, a USD 10.75Mn and EUR 3.3Mn dual-currency senior facility, a USD 10Mn senior unsecured facility and a EUR 5Mn subordinated debt line.

The lenders in these transactions are development finance institutions, impact debt funds and offshore commercial banks. Each has its own credit process, its own eligibility screens and its own view on country risk, and the order in which they are approached matters as much as the list itself.

Green and sustainability-linked loans

Two of our Sri Lankan transactions have been green loans — a USD 3.5Mn facility and a USD 10Mn LKR-equivalent facility.

Green and sustainability-linked structures carry a set of performance targets with a margin that steps up or down depending on whether they are met. The pricing benefit comes with ongoing obligations, and we make sure borrowers understand that trade-off before committing to the structure.

Local and foreign currency structures

Five of our Sri Lankan facilities were denominated in LKR-equivalent terms rather than hard currency, and we have also arranged USD deposit structures of USD 18Mn and USD 20Mn.

A lender whose own book is in USD or EUR carries or hedges the risk if it lends in rupees; a Sri Lankan borrower whose assets are in rupees carries it if it borrows in dollars. Which side holds that risk, and at what cost, is a negotiating point rather than a given. We have closed facilities structured in hard currency, in LKR-equivalent terms and as dual-currency facilities.