Stopgap

State run Bank of Ceylon has lent US$ 75 mn to the government help bridge the budget deficit.
The one-year loan is priced at 192 basis points above the six-month London interbank offered rate.rn

rnThe government had opted for the loan after the Treasury put off a planned roadshow to raise funds up to US$ 150 mn from overseas capital markets.rn

rnldblquote We felt it was cheaper for us to borrow from them [from Bank of Ceylon] than go to the overseas markets now. With US interest rates also being reduced, the loan was more attractive,
dblquote Central Bank
quote s Deputy Governor, W A Wijewardene told Lanka Business Online.rn

rnIn October, the Treasury gave a join mandate to Deutsche Bank and UBS Warburg to raise US$ 100 mn through a floating rate note, with an option to raise a further US$ 50 mn if the terms are attractive.rn

rnWijewardene was due to lead the Lankan delegation this week to Singapore, Dubai, Bahrain, London and Abu Dhabi.rn

rnA concurrent mandate to Citibank to raise US$ 150 mn through a five-year syndicated loan is on schedule with the funds expected later this year.rn

rnThe syndication comes with a 90 percent guarantee from Japanese government backed Nippon Export Investment Insurance Co. or NEXI and the funds will be raised purely through Japanese banks.rnrn