June 20 (LBO) – A Sri Lanka government dollar bond issue targeting local investors was oversubscribed Tuesday, allowing the government to roll-over maturing bonds at much lower rates.
A 50 million dollar loan from Bank of Ceylon is also maturing on June 22nd which was issued at premium of 185 basis points above LIBOR.
The issuing authority Central Bank of Sri Lanka said, 365.7 million dollars of bids were received for 150 million dollars worth 2-year Sri Lanka Development bonds, and 105.35 million dollars worth of bids were received for 50 million dollars worth 3-year bonds.
â€œThe offer was opened for subscription at a rate of 6 month LIBOR plus a margin determined through competitive bidding,â€ a Central Bank statement said.
â€œAs the offer was heavily oversubscribed, the Government has decided to accept US Dollars 250 million of 2 year SLDBs at a rate of 6 month LIBOR + 130.75 basis points (weighted average) and US Dollars 50 million of 3 year SLDBs at a rate of 6 month LIBOR + 140 basis points (weighted average)â€.
A US $ 144.75 million tranche of Sri Lanka Development Bonds maturing on the 28th was issued in June 2004 at rates around 185 basis points above LIBOR.
A US $ 50 million dollar bond maturing in August which was also issued in 2004, carried a rate of 179 basis points above LIBOR.
The bonds have been trading in the market for around 150 basis point premium.