Sri Lanka’s Central Bank said Tuesday that it may float a planned US$ 200-million bond issue later this year or early next year – depending on market conditions. Sri Lanka’s Central Bank said Tuesday that it may float a planned US$ 200-million bond issue later this year or early next year – depending on market conditions. The Central Bank raised US$ 145 million through a bond issue last month that was oversubscribed mainly by local and foreign banks.
It plans to issue US$ 50 million in two-year bonds next month and had said last month that a further US$ 200 million may be raised in tranches this year to support the government budget.
“Further bond issues will depend on market conditions – maybe the latter part of this year or early next year,” H.N. Thenuwera, the superintendent of public debt at the central bank, told Dow Jones Newswires Tuesday.
A bonds issue may be difficult if local interest rates pick up later this year and the currency continues to depreciate against the U.S. dollar.
Sri Lankan interest rates have inched up in recent months over uncertainty surrounding a peace process with the Tamil Tiger rebels and chances the government may not stick to its budget deficit target.
The US$ 145-million bond issue last month offered an average yield of 185.2 basis points above the six-month London interbank offered rate.