Offering Circular

OFFERING CIRCULAR CONFIDENTIAL US$1,500,000,000 The Democratic Socialist Republic of Sri Lanka 6.850% Bonds due 2025 The US$1,500,000,000 6.850% Bonds due 2025 (the “Bonds”) of the Government of the Democratic Socialist Republic of Sri Lanka (the “Issuer”) will be issued in registered form in minimum denominations of US$200,000 and integral multiples of US$1,000 in excess thereof. Interest on the Bonds will be payable semi-annually in arrears on May 3 and November 3 of each year commencing on May 3, 2016. The Bonds are not redeemable prior to maturity. Except as described herein, payments on the Bonds will be made without deduction for or on account of withholding taxes imposed by Sri Lanka. The Bonds will mature at par on November 3, 2025. The Bonds will constitute direct, unconditional, unsubordinated and unsecured general obligations of the Issuer. The Bonds will at all times rank pari passu among themselves in all respects, without any preference of one over the other by reason of priority of date of issue or otherwise. The Bonds will at all times rank at least equally with all other present and future unsecured and unsubordinated External Indebtedness (as defined herein) of the Issuer. The full faith and credit of the Democratic Socialist Republic of Sri Lanka will be pledged for the due and punctual payment of the principal of, and interest on, the Bonds. The Bonds are expected to be rated “B+” by Standard & Poor’s Ratings Services, “B1” by Moody’s Investors Service and “BB-” by Fitch Ratings. The ratings assigned by rating agencies are indicative and may go up and down from time to time. A credit rating is not a recommendation to purchase, hold or sell securities and may be subject to suspension, change or withdrawal at any time by the assigning rating agency. The Bonds are a new issue of securities with no established trading market. Application will be made to the Singapore Exchange Securities Trading Limited (the “SGX-ST”) for the listing and quotation of the Bonds on the SGX-ST. The Bonds will be traded on the SGX-ST in a minimum board lot size of S$200,000 (or its equivalent in foreign currencies) for so long as the Bonds are listed on the SGX-ST and the rules of the SGX-ST so require. Accordingly, the Bonds will be traded on the SGX-ST in a minimum board lot size of US$200,000. The SGX-ST assumes no responsibility for the correctness of any of the statements made, opinions expressed or reports contained in this Offering Circular. Approval in-principle from, admission to the Official List of, and listing and quotation of any Bonds on, the SGX-ST are not to be taken as an indication of the merits of the Issuer or the Bonds. The Bonds have not been and will not be registered under the U.S. Securities Act of 1933, as amended (the “Securities Act”), or with any securities regulatory authority of any state or other jurisdiction of the United States. The Bonds may not be offered or sold within the United States or to U.S. persons, except to qualified institutional buyers (“QIBs”) in reliance on the exemption from registration provided by Rule 144A under the Securities Act (“Rule 144A”) and outside the United States in offshore transactions in reliance on Regulation S under the Securities Act (“Regulation S”). Prospective investors are hereby notified that sellers of the Bonds may be relying on the exemption from the provisions of Section 5 of the Securities Act provided by Rule 144A. For a description of certain restrictions on resale or transfer, see “Plan of Distribution” and “Notice to Investors”. Price: 100% Delivery of the Bonds is expected to be made on or about November 3, 2015 through the book-entry facilities of The Depository Trust Company (“DTC”). Joint Lead Managers and Bookrunners Citigroup DeutscheBank HSBC StandardCharteredBank The date of this Offering Circular is October 27, 2015. Prospective investors should rely only on the information contained in this Offering Circular. No person has been authorized to give any information or to make any representation other than those contained in this Offering Circular in connection with the offering of the Bonds (the “Offering”) and, if given or made, such information or representations must not be relied upon as having been authorized by the Issuer or the initial purchasers named in “Plan of Distribution” (the “Initial Purchasers”). Neither the delivery of this Offering Circular nor any sale made hereunder shall, under any circumstances, constitute a representation or create any implication that there has been no change in the affairs of the Issuer since the date hereof. This Offering Circular does not constitute an offer of, or an invitation by, or on behalf of, the Issuer or the Initial Purchasers to subscribe for, or purchase, any of the Bonds in any jurisdiction in which such offer or invitation is not authorized or unlawful. TABLE OF CONTENTS NOTICE TO NEW HAMPSHIRE RESIDENTS...................... ............ v CERTAIN DEFINED TERMS AND CONVENTIONS. ............ v FORWARD LOOKING STATEMENTS ........................... ............. vii ENFORCEABILITY OF FOREIGN JUDGMENTS. ............. viii DATADISSEMINATION .................................. ................. ix EXCHANGE RATE INFORMATION ............................ .............. ix SUMMARY............................................ ................. 1 THEOFFERING........................................ ................. 20 USEOFPROCEEDS...................................... ............... 23 THE DEMOCRATIC SOCIALIST REPUBLIC OF SRI LANKA . ........... 24 History,LandandPeople .............................. ................ 24 Government......................................... ................ 25 Conclusion of Military Action against the LTTE and Resettlement, Development and ReconciliationActivities........................... ..................... 34 International Relations............................. .................... 36 Recent Economic Indicators ........................... ................. 39 Overview of the Sri Lankan Economy...................... ............... 39 GDP and Major Financial Indicators ..................... ................. 45 Principal Sectors of the Economy....................... ................. 51 Prices, Employment and Wages .......................... ............... 59 i LaborRelations..................................... ................. 66 BalanceofPayments.................................. ................ 69 MonetarySystem..................................... ................ 96 Sri Lankan Financial Institutions..................... .................... 107 Sri Lankan Securities Markets......................... .................. 114 PublicFinance...................................... ................. 118 GovernmentBudget................................... ................ 123 Debt............................................... ................ 127 DESCRIPTION OFTHE BONDS.............................. .............. 143 TAXATION ........................................... .................. 158 PLANOFDISTRIBUTION ................................. ................ 161 NOTICETOINVESTORS.................................. ................ 167 LEGALMATTERS ....................................... ................ 169 PUBLIC OFFICIAL STATEMENTS AND DOCUMENTS . ............ 169 GENERALINFORMATION................................. ................ 170 INDEBTEDNESS OF THE DEMOCRATIC SOCIALIST REPUBLIC OF SRI LANKA..... T-1 This Offering Circular has been prepared by the Issuer solely for use in connection with the Offering described in this Offering Circular. This Offering Circular is personal to each offeree and does not constitute an offer to any other person or to the public generally to subscribe for or otherwise acquire securities. Distribution of this Offering Circular to any other person other than the prospective investor and any person retained to advise such prospective investor with respect to its purchase is unauthorized, and any disclosure of any of its contents, without our prior written consent, is prohibited. Each prospective investor, by accepting delivery of this Offering Circular, agrees to the foregoing and to make no copies of this Offering Circular. For a description of some restrictions on the offer and sale of the Bonds and the distribution of this Offering Circular, see “Plan of Distribution” and “Notice to Investors”. The Initial Purchasers make no representation or warranty, express or implied, as to the accuracy or completeness of the information contained in this Offering Circular. Nothing contained in this Offering Circular is, or shall be relied upon as, a promise or representation by the Initial Purchasers as to the past or future. The Issuer has furnished the information contained in this Offering Circular. The Initial Purchasers have not independently verified any of the information contained herein (financial, legal or otherwise) and assume no responsibility for the accuracy or completeness of any such information or of any other information provided by the Issuer in connection with the Bonds in their distribution. ii The Issuer, having made all reasonable inquiries, confirms that this Offering Circular contains all information which is material in the context of the Offering, that the information contained in this Offering Circular is true and accurate and is not misleading in all material respects, that the opinions and intentions expressed in this Offering Circular are honestly held, and that there are no other facts the omission

Load more