Sri Lanka looks to raise US$500mn abroad

April 17, 2009 (LBO) – Sri Lanka is looking to raise 500 million dollars from international markets when conditions turn more favourable, while rolling over about 300 million dollars more in maturing dollar debt in 2009, an official said. Global financial markets have turned risk averse compared to two years ago when Sri Lanka sold a 500 million dollar sovereign bond.

“Anytime a window opens we will go,” the head of Sri Lanka’s public debt office, C P J Siriwardene said.

In 2008 Sri Lanka faced tough conditions, forcing the country to abort a 300 million US dollar syndicated loan. Investors also pulled out more than 400 million dollars from rupee denominated securities.

Siriwardene said the government had the option of floating a sovereign bond or a syndicated loan and the decision will be made based on market conditions.

He said both Philippines and Indonesia had raised money in international markets, but risk premiums were higher.

Sri Lanka also has 475 million US dollars of dollar denominated debt maturing in 2009. In March 184.25 million US dollars out of a maturing tranche of 475 million US dollars of marketable debt dubbed ‘Sri Lanka Development Bonds’ was rolled over.

SLDBs are targeted at the domestic market but can be bought by foreign investors.

On June 28, 50 million US dollars of bonds are maturing, on August 18, 175 million dollars of bonds are maturing and on September 20 another 35 million dollars are due to mature.

Siriwardene said the government was hoping to get a modest 25 million US dollars over the maturities during 2009 through Sri Lanka Development Bonds.