Bond yields rise, ahead of military unrest

May 30, 2006 (LBO) – Sri Lanka’s bond market lost ground on Tuesday and continued to rise stealthily at this week’s auction, as the military began probing the massacre of 12 construction workers by Tamil Tiger rebels. The Central Bank sold Rs. 350 billion treasury bonds in three, four and five year maturities, after rejecting bids for two consecutive weeks.

Investors will pay for the securities on June 1.

Details of the auction are as follows:

 


Treasury Bond Auctions


3-years

4-years

5-years
Date of Maturity 01-06-2009 01-02-2010 01-02-2011
Coupon Rate 7.50% 7.20% 7.00 %
Amount Offered (LKR) 1,000 750 750
Bids Received
(LKR)
2,025 1,635 1,610
Amount Accepted (LKR) 1,000
750

750
Weighted Average Yield 10.90% 10.92% 10.95%
Date of Settlement 01-06-2006 01-06-2006 01-06-2006
(Source:
Central Bank)