Sri Lanka government issue dollar bond issue at lower rates

June 20 (LBO) – A Sri Lanka government dollar bond issue targeting local investors was oversubscribed Tuesday, allowing the government to roll-over maturing bonds at much lower rates.

A 50 million dollar loan from Bank of Ceylon is also maturing on June 22nd which was issued at premium of 185 basis points above LIBOR.

-LBO Newsdesk-

The issuing authority Central Bank of Sri Lanka said, 365.7 million dollars of bids were received for 150 million dollars worth 2-year Sri Lanka Development bonds, and 105.35 million dollars worth of bids were received for 50 million dollars worth 3-year bonds.

“The offer was opened for subscription at a rate of 6 month LIBOR plus a margin determined through competitive bidding,” a Central Bank statement said.

“As the offer was heavily oversubscribed, the Government has decided to accept US Dollars 250 million of 2 year SLDBs at a rate of 6 month LIBOR + 130.75 basis points (weighted average) and US Dollars 50 million of 3 year SLDBs at a rate of 6 month LIBOR + 140 basis points (weighted average)”.

A US $ 144.75 million tranche of Sri Lanka Development Bonds maturing on the 28th was issued in June 2004 at rates around 185 basis points above LIBOR.

A US $ 50 million dollar bond maturing in August which was also issued in 2004, carried a rate of 179 basis points above LIBOR.

The bonds have been trading in the market for around 150 basis point premium.