Sri Lanka: Remittances rise 13% to $6.8 billion

Updated 21 March 2014
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Sri Lanka: Remittances rise 13% to $6.8 billion

COLOMBO: Sri Lanka’s economy grew a weaker-than-expected 7.3 percent last year, the country’s central bank said as it kept interest rates at multi-year lows as it looks to boost private investment and lending.
Sri Lankans employed abroad sent home $6.8 billion over the year, up 13 percent from 2012 while earnings from tourism jumped 35 percent to $1.4 billion in 2013, according to official figures.
The Central Bank of Sri Lanka said last year’s expansion was much stronger than the 6.3 percent recorded in 2012 thanks to a pick-up in exports and foreign remittances.
However, the figure was below the bank’s 8.0 percent forecast as an expected rise in lending had not taken place.
“Credit to the private sector by commercial banks moderated, growing only by 5.2 percent in January 2014 in comparison to 7.5 percent in December 2013,” the bank said in its monthly review of the economy.
Officials said the softer data came as loans to the private sector rose just 15.5 percent last year, well short of estimates of 18 percent.
But the bank said its Monetary Board viewed the deceleration in those loans to be “temporary.”
It added: “Private sector credit is likely to rebound from the second quarter of (2014), supported by declining market lending rates, sufficient liquidity levels and increased demand for exports from the advanced economies.”
The bank kept rates on hold Friday after cutting them by 50 basis points to 8.0 percent in January — the lowest since it began publishing them in 1999 — as it looks to boost private-sector lending.
In January the the bank said record remittances and tourism earnings helped wipe out a trade deficit in 2013 and improve foreign reserves in a country relying heavily on external debt.
Official figures showed Sri Lanka’s overall balance of payments ended up with a surplus of $991 million, compared with a modest surplus of $151 million in 2012 and a deficit of $1.06 billion in 2011.
The improvement in the balance of payments was also helped by garment exports which increased by 26 percent while the island’s main export commodities of tea and coconut also increased significantly.
The IMF had warned Sri Lanka late last year against rate cuts and forecast 2013 growth at 6.5 percent.
Sri Lanka’s economy recorded 8.0 percent-plus growth for two straight years after troops crushed separatist Tamil Tiger rebels in 2009, but the pace has slowed in the last two years.


Dubai Aerospace signs $480 million loan deal

Updated 21 May 2018
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Dubai Aerospace signs $480 million loan deal

DUBAI: Dubai Aerospace Enterprise (DAE), one of the world’s largest aircraft lessors, said on Monday it had signed a four-year loan deal for $480 million.
DAE, a government-controlled company set up in 2006, has become one of the world’s largest aircraft lessors after acquiring Dublin-based AWAS last year.
The acquisition tripled the Dubai aircraft leasing and maintenance company’s portfolio to about 400 aircraft worth more than $14 billion.
The $480 million loan, which includes both conventional and Islamic finance tranches, has a so-called “accordion facility” allowing it to be increased to up to $800 million.
With the loan, the company’s unsecured revolving credit facilities increase to between $1.125 billion and $1.445 billion, depending on final size of the latest deal, Firoz Tararpore, DAE’s chief executive, said in a statement.
“On a pro forma basis as of December 2017, if this facility is fully drawn and if the proceeds are used to pay down secured indebtedness, DAE’s percentage of unsecured debt would increase from 26 percent to a range of 31-34 percent.”
Last year, the company issued $2.3 billion in senior bonds split across three tranches last year, partly to finance the AWAS acquisition.
Tarapore said in an interview last week that DAE was in talks to buy a near-record total of 400 jetliners from Airbus and Boeing in an order that could be worth more than $40 billion at list prices.
Al Ahli Bank of Kuwait coordinated the latest loan deal and was also the lead arranger and joint bookrunner together with First Abu Dhabi Bank, while Noor Bank joined the deal as lead arranger.