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SL plans to issue sovereign bond for up to $1 bln

21 June 2012 06:22 am - 6     - {{hitsCtrl.values.hits}}

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Sri Lanka plans to sell sovereign euro bonds worth up to $1 billion to add to its dollar reserves and give the central bank more room to defend the weakening rupee currency.

The central bank has selected four global investment banks as joint lead managers, bookrunners and underwriters for the proposed issue, it said in a statement on Thursday.

The issue will be Sri Lanka's fifth sovereign bond since it first sold a $500 million 5-year euro bond in October 2007.

The announcement comes as the rupee traded near its record low of 133.60 against the dollar, and traders said the proceeds may be used to stabilise the currency, which has slumped around 17 percent since last November.

The central bank and finance ministry have said in the past the proceeds of the bond will be used to for the redemption of its debut euro bond which matures in October this year.

Sri Lanka has been using the bond proceeds to finance a raft of infrastructure projects long neglected due to its protracted civil war and to retire some of its expensive short-term foreign debt.

The central bank also said it will sell $150 million worth 3-year Sri Lanka Development bonds to retire maturing securities used for development financing.
Bank of America Merrill Lynch, Barclays Capital , Citibank NA, Hongkong and Shanghai Banking Corporation Limited are the four banks selected by the central bank for the latest global issue.

Since the war ended in 2009, there has been a resurgence in foreign investor interest in the island.

Colombo sold a $1 billion, 10-year euro bond in July last year priced at 6.25 percent with an oversubscription of 7.5 times.

The 6.25 percent 2021 bond, which is the most liquid among Sri Lanka's sovereign bonds in the secondary market, was quoted at 6.07 percent on Thursday, 444 basis points higher than the comparable U.S. Treasury bond. (Reuters)
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  Comments - 6

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  • Pol Haraka Friday, 22 June 2012 05:26 AM

    accountant 467LKR per person is very cheap..
    that is 467/12 = 38.92 per month
    38.92/ 30 = 1.30 per day

    Small money for the people of Sri Lanka... i am sure that goverment can multiply this 10 fold as i am willing to give 13 rs per day for our GOSL...

    come on people lets help our nation...
    (by the way i am just being Sarcastic) lol

    Siripala Thursday, 21 June 2012 08:29 AM

    Coming up with some ideas now, are we?.
    They are obviously running scared.

    Kondebendapucheena Thursday, 21 June 2012 11:27 AM

    OMG are we going to end up like Greece Bond after Bond

    Dalu banda Thursday, 21 June 2012 11:52 AM

    Can anyone guess that how many Billion dollar bonds have taken by this government so far?

    Accountant Thursday, 21 June 2012 12:33 PM

    Hmm....
    1,000,000,000 x 6.25% = 62,500,000 euros per year as interest
    if 1 euro = LKR 150
    62,500,000 x 150 = LKR 9,375,000,000 per year as interest
    total population of sri lanka = 20,000,000

    Therefore = 9,375,000,000 / 20,000,000
    = LKR 467 per person per year

    That's from every child to elder in the country.

    Shamini Thursday, 21 June 2012 12:55 PM

    Raising loans to service loan repayments. Aren't we getting more and more into debt?


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