Sri Lanka converts state dollar loans to bonds

April 23, 2009 (LBO) – Sri Lanka has converted hundreds of millions of dollar denominated loans from state banks in a move that will improve the transparency of government debt and make them marketable, an official said.

The bonds could now be offered to any investor when they are rolled over increasing access and state run banks would also have the option of reducing exposure if they want to.

In 2008, Sri Lanka has converted 593.07 million US dollars of loans from foreign currency banking units of mainly state-run bank of Ceylon into 2 and 5-year bonds.

“This will improve the transparency of government debt,” the head of the public debt office C J P Siriwardene said.

“The bonds will also be more marketable.”

A part of the loan had been converted to 195.0 million US dollars of 2-year Sri Lanka Development Bonds from July 15, 2008.

The balance had been converted into 398.07 million dollars of 5-year bonds, also from July 15.