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SL sells $1 Billion of bonds


18 July 2012 05:31 am - 16     - {{hitsCtrl.values.hits}}


Sri Lanka's $1 billion, 10-year sovereign bond will yield 5.875 percent and was more than ten times oversubscribed, two sources close to the deal said on Tuesday.

The price matched the central bank's estimate of below 6 percent. A similar bond yielded 6.25 percent last year.

Sri Lanka's third Eurobond was sold as Europe grapples with a debt crisis and the United States, where Sri Lanka has the largest fixed-income investor pool for its sovereign paper, is struggling with sluggish economic growth.

"It's finalised at 5.875 percent," a source close to the deal said. "It was oversubscribed 10.5 times and the yield is substantially lower than last year."

Bank of America Merrill Lynch, Barclays Capital , Citibank NA, and HSBC were lead managers.

Sri Lanka revised the guidance on its latest Eurobond to 5.875-6 percent from 6.125 percent amid strong demand early in the day when it opened the order book in Asia.

It is the island nation's fifth sovereign bond since the it started to tap international capital markets in 2007 aiming to fund its long-neglected raft of infrastructure projects.

Proceeds from the bond will be used to pay off the country's debut 5-year $500 million Eurobond with a 8.25 percent yield and more pricey short-term debt used for infrastructure projects.

Local currency dealers said on Tuesday they expected Sri Lanka's rupee currency to touch 130 against the dollar soon due to expected inflows from the bond.

Yields have tightened since the October 2007 issue as Sri Lanka started to deal with fiscal weaknesses as agreed with the International Monetary Fund in exchange for a $2.6 billion loan approved in July 2009 (REUTERS)


  Comments - 16

  • Mushtaq Wednesday, 18 July 2012 05:56 AM

    Here we go again, around the mull-berry-bush

    mohan Wednesday, 18 July 2012 05:57 AM

    5.875 pretty high for us$ nominated bond . USA 10 10y bond yield 1.48% no wonder it's over oversubscribed. it;s good time for pay off Euro bond, as euro @ rock bottom , it might bounce in few days

    Sedwatta Sarneris Wednesday, 18 July 2012 06:10 AM

    The party starts, NOW.

    buffaloa citizen Wednesday, 18 July 2012 06:38 AM

    Halleluja for the regime, the coffers are filled again, time for partying and charter flights again. Nevermind the fact that the country has been sold for two generations ahead.

    Riyaz Wednesday, 18 July 2012 07:54 AM


    Big B Wednesday, 18 July 2012 08:45 AM

    Too Late

    SL Wednesday, 18 July 2012 09:00 AM

    Hello, can someone describe what this exactly means?
    Thanks in advance!

    Internet Wednesday, 18 July 2012 09:19 AM

    We are in debt to the tune of 1 Billion USD + Interest at 5.875

    kumara Wednesday, 18 July 2012 09:27 AM

    Another loan to pay off another loan...!! what a good stratergy !!

    shanaka Wednesday, 18 July 2012 09:52 AM

    in simple term - A high cost loan is paid off with a lower cost loan. If people cant understand this logic, please do not comment!

    Dumb Wednesday, 18 July 2012 09:56 AM

    which means we have to pay a total of US$ 1.5875 Billion at the end of 10 years...

    almost 58.75% more in 10 years.... Brilliant work as usual by the CB...

    nandos Wednesday, 18 July 2012 10:29 AM

    Oh, my poor indebted unborn kids!

    summa Wednesday, 18 July 2012 10:38 AM

    Man ....can you compare US with are talking nonsense. Further, Eurobond does not refer to bonds trade in currency of Euro states. Just learn first and them comment.

    Yehiya-Jeddah Wednesday, 18 July 2012 11:03 AM

    Like colombo stock exchange

    shan Wednesday, 18 July 2012 04:47 PM

    Very soon they will the whole Srilanka

    Kos Ata Kabraal Wednesday, 18 July 2012 05:09 PM

    Calm down guys. No harm done.These are sovereign funds after all. Our Swiss Accounts are still safe.

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