Longer Horizon

The Central Bank will launch its maiden 20-year treasury bond this month with an issue of Rs. 1 bn due on October 20.
Superintendent Public Debt Dept, Dharma Dheerasinghe said the bank was hoping to raise Rs. 7.7 bn through Octobers borrowing programme.rn

rnldblquote We have now revised it to include the 20 year issue, which will be offered at a coupon rate of seven percent. We will in the future look to issue more longer-term issues of 10-15 years,
dblquote he told Lanka Business Online.rn

rnHe said the bank retired Rs. 7 bn in debt late last month, after government received US$ 100 mn through a commercial borrowing from Citibank N.A.rn

rnDheerasinghe also said the bank was looking at issuing inflation-linked government bonds as part of its market development programmes.rn

rnThe interest rates on the bonds will be directly linked to inflation as identified by a specified inflation index. rn

rnThe widely used Colombo Consumers Price Index will not be calculated from next year, prompting analysts to say that the Central Bank might use the Sri Lanka Consumer Price Index as the benchmarkrn

rnThe Public Debt Department is also doing the preparatory work to enable Sri Lanka to seek a sovereign rating next year.rn

rnThe banks Deputy Governor, W A Wijewardene said on Tuesday that a the government will seek two ratings endash one from Fitch Ratings International and the other from Moodys Investor Services or Standard & Poor.rn

rnWijewardene said a rating from Fitch International is expected by next January. rn

rnldblquote We dont plan to borrow in the international markets at the moment, but we want a rating to create a benchmark for the country,
dblquote Dheerasinghe said adding that the bank will write to international rating agents, like Citibank and J P Morgan who presently have a local presence, about playing an advisory role in the process.rn