Finance Ministry calls for proposals for unspecified value of Foreign Currency Term Financing Facility

The Ministry of Finance has called for offers for an unspecified value of Foreign Currency Term Financing Facility (FCTF) denominated in US Dollars, Euro, Chinese Renminbi and Japanese Yen.Issuing a Request For Proposals (RFPs) on 31st August 2021, the Ministry of Finance said that the FCTF is expected to be raised at a fixed rate or a floating rate with a maturity period of one year or more.The proceeds of the FCTF will be used for the purposes of financing the expenditure as approved in the Annual Budget, according to the Ministry of Finance.Proposals for this should be submitted on or before 22 September while the financing proposals have been sought from banks, institutional investors and investment houses, it said.

“They should include separate proposal/s for different currencies and different options in each currency based on the structure of the FCTF such as size, cost (fixed or floating), third party expenses, tenure, repayment and the estimated lead time required to make the FCTF available to the government.””The cost of FCTF should be expressed as a percent per annum in fixed or floating rate arrangement, whilst an all-inclusive cost for each financing arrangement proposed should be indicated with the maturity period intended for the FCTF.” the Finance Ministry said.”Repayment can be in bullet or in tranches while interest will be paid half yearly. Banks, institutional investors and investment houses can submit proposals on a standalone basis or collectively. The government will have the rights to engage with one or more banks, institutional investors or investment houses for the proposed FCTF. The names of the banks, institutional investors and investment houses that have submitted proposals will be announced on 22 September,” RFP made by the Ministry of Finance further said.

The Finance Ministry had made a similar request in mid-June 2020 for proposals to raise USD-denominated term financing up to a limit of $ 500 million.

HSBC, State Bank of India, Credit Suisse, China’s Industrial and Commerce Bank and Sri Lanka’s Acuity Partners had responded to the government’s invite at the time.

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