Sri Lanka on road show to stir up debt buyers

July 16, 2009 (LBO) – Investors who met a Sri Lanka government team who are on a road show ahead of a possible debt deal are bullish on the country’s prospects after the end of a 30-year war, a top official said.

“Many investors are interested in the Sri Lanka situation and are quite bullish in their assessment of the country,” Central Bank Governor Nivard Cabraal told LBO from Hong Kong, one of the stops in the road show.

A Sri Lankan delegation is visiting a number of financial centres including New York later in July to update investors in a ‘non deal’ road show arranged by HSBC and JP Morgan, reports said.

The Central Bank, which runs the government’s debt office as an agency function said in March that the country was looking to raise about 500 million dollars in fresh foreign funding this year.

A sovereign bond or syndicated loan will be floated as soon as a window opens, an official said at the time.

Sri Lanka’s state revenues have been falling and the government is also looking to raise foreign funds. Following a float of the rupee hedge funds have started buying into government treasuries.

Though Sri Lanka’s fiscal policies have deteriorated in recent year, following the end of a war with Tamil Tiger separatists in May, optimism is high.

The government is planning a massive reconstruction drive especially in the north of the country.

Updated