Central Bank rejects 3-year bond auction

May 16, 2006 (LBO) – Sri Lanka’s Central Bank Tuesday rejected all bids sent in for the three-year bond auction, but did not give any reason. The bank offered a billion rupees worth of paper and received offers worth 1,360 million rupees, which carried a coupon rate of 7.50 percent.

Three-year paper currently trades at around 11.30 percent in the secondary market.

Last Wednesday, the bank sold three-year yield 10.87 percent, higher than 10.85 percent sold at the previous auction, Market players said that the bank was expecting bids lower than 11.00 percent, which may have been the reason to call the auction off.

– LBO Newsdesk