Three-year bonds sold for US$ 121 m

• Issue oversubscribed by two times, says Central Bank

The Central Bank has had its latest issue of Sri Lanka Development Bonds oversubscribed by two times, bringing the total bid to US$ 121.05 million, the monetary institution said in a statement.  

The Central Bank of Sri Lanka, on behalf of the Government of Sri Lanka, offered to issue Sri Lanka Development Bonds (SLDBs) of US$ 60 million of three-year tenure to eligible investors for subscription at a rate of US$ 6-month LIBOR plus a margin to be determined through competitive bidding.

The offer was opened from 10-17 September 2012 for bidding with the settlement on 24 September 2012.  Foreign and local commercial banks operating in Sri Lanka subscribed bids at the auction.

“The offer was oversubscribed by two times with total bids received amounting to US$ 121.05 million. In view of the high demand by the investors, the Government decided to accept US$ 121.05 million in three-year maturity at the market determined rates of US $ 6-month LIBOR+ 400 bps (weighted average margin),” the bank said in a statement.  

Today, the US$ 6-month LIBOR rate is 0.67 per cent. With this transaction, the Government succeeded in achieving a lower margin compared to the 410 bps of the previous three-year SLDB issue in June 2012.   

The SLDB issue was executed in terms of Section 2 (a) and 2 (c) of the Foreign Loans Act No. 29 of 1957 as amended.

The SLDBs are transferable by endorsement, delivery and registration with the Superintendent of Public Debt of the Central Bank of Sri Lanka. Eligible investors may purchase SLDBs in the secondary market through Designated Agents appointed by the Central Bank of Sri Lanka.