The government issues a US$ 50 mn two-year bond, next month as part of efforts to raise up to US$ 400 mn

The government is issuing a US$ 50 mn two-year bond, next month as part of its fund raising drive to bridge the budget deficit. The government is issuing a US$ 50 mn two-year bond, next month as part of its fund raising drive to bridge the budget deficit. The issue is part of the government’s efforts to raise up to US$ 400 mn this year, without putting pressures on the local debt market.

The Central Bank’s Public Debt Dept., who is raising the money on behalf of the government said Monday that the issue will open for subscription from August 9-12. The payment is due on August 20.

The first round completed in June, raised US$ 144.75 mn in two-year bonds priced at 185.20 basis points over the six month’s LIBOR (London interbank offered rate).

The second issue too is priced at six month’s LIBOR, with primary dealers and banks having to competitively bid for the spreads.

The minimum investment is US$ 100,000 and in multiples of US$ 10,000.

The government is expecting a sizable amount of further foreign funds from International Donor Agencies in mid August 2004, the bank said.

“The foreign fund inflows will result in reduction of domestic borrowing and retirement of maturing debt in August 2004.”

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