Development Bonds oversubscribed

COLOMBO: The first issue of Sri Lanka Development Bonds for 2007 has been oversubscribed more than four times, with bids amounting to US$ 215.25 million being received, the Central Bank said yesterday.

"The investors' response to the issue is very encouraging and clearly reflects the investors' confidence and their preference to lock their funds in guilt edged Dollar Bonds issued by the Government of Sri Lanka," the Bank said.

The Bank offered Development Bonds amounting to US$ 50 million for a two year maturity period for eligible investor categories including foreign citizens, non resident Sri Lankans, Sri Lankan dual citizens, specified companies which have entered into agreements with the Board of Investment of Sri Lanka and specified insurance companies.

The offer was opened for subscription at a rate of 6 month LIBOR plus a margin determined through competitive bidding. As the offer was heavily oversubscribed at reasonably lower margins, the Government has decided to accept all bids received, US Dollars 215.25 million of 2 year SLDBs, at a rate of 6 month LIBOR + 155.2407 basis points (weighted average). The offer was overwhelmingly subscribed by both reputed foreign and local commercial banks.

This is the first SLDB issue in 2007 and this issue is within the approved borrowing limit of Parliament for 2007.

Eligible investors can purchase SLDBs from Designated Agents appointed by the Central Bank of Sri Lanka for marketing the SLDBs. The SLDBs are transferable by endorsement, delivery and registration with the Superintendent of the Public Debt of the Central Bank of Sri Lanka.