Patriotic Bonds

Sumith Arangala, Chief Executive Officer, LVL Energy Fund (left) handing over the agreement to Nanda Fernando, Managing Director, Sampath Bank

Feb. 01 (LBO) – Sri Lanka plans to issue a US$ 25 million sovereign bond to expatriate countrymen this week, to fund the island’s rebuilding efforts, officials said Wednesday. The small issue will not use the country’s credit rating as a marketing tool, but the government is keen to accept any extra bids over an above the initial offer amount.

State-run Bank of Ceylon will lead manage the issue, with the Central Bank and the Treasury chipping in to market the paper.

“The Treasury and the Central Bank will tap our diplomatic missions abroad to reach out to Sri Lankans living and working overseas,” Bank of Ceylon’s Chief Dealer N K Dahanayake told LBO.

Pricing of the five-year issue has not been fixed yet, but the minimum subscription will start from US$ 500, or equivalent in sterling or euros, LBO learns.

Dubbed ‘Sri Lanka Nation Building Bonds’, the issue is tipped to be launched later this week and will be open for 180 days.

The bond will not go on sale in the US and Hong Kong due to regulatory barriers, but would be on offer in other countries.

Treasury Secretary P B Jayasundara said last month that the island planned to use its sovereign r