Bond Show

Feb. 3 (LBO) – Sri Lanka will shortly start selling a billion dollars in government bonds with the help of Citibank, Treasury Secretary P B Jayasundara said Friday. “Citibank has been appointed and we will finalise the process within the next two weeks,” Jayasundara told reporters.

Jayasundara said the structure of the billion-dollar issue is being worked out and will be announced shortly.

“If the financial advisors tell us it is better to raise it all at once we will consider it,” Jayasundera said.

LBO learns the Citi-managed 7-year issue bond issue would carry a six-month floating interest above the London Interbank Offered Rate or LIBOR.

Last December, Citigroup raised US$ 100 million for the government through a three-year syndicated loan priced at 95 basis points above LIBOR, though total issue costs may have been 125 basis points above LIBOR.

Analysts believe the government may have to pay at least 150 basis points above LIBOR for the 2006 issue.

Sri Lanka’s foray into the international capital markets comes after the island got its maiden sovereign rating last December, a first step in tapping the international bond market