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Government Gazette

Bond issue raises investor confidence

Sri Lanka’s five-year, $500 million bond offering has received orders worth more than $1.25 billion, which was oversubscribed three times over. The Government will obtain this loan at an annual interest of 8.25 per cent, Minister of State Revenue and Deputy Finance Minister Ranjith Siyambalapitiya said.

“This was a victory for the Government and the people of Sri Lanka. The money will be utilised especially for infrastructure development projects such as such as the Galle Port, Upper Kotmale power generation project and the Norochcholai power plant are some of projects,” Minister Siyambalapitiya said.

Minister Siyambalapitiya said the Government would pay only the interest for five years. “If we generated the

Minister of State Revenue Ranjith Siyambalapitiya addressing the media yesterday.

Picture by Sumanachandra Ariyawansa

 fund out of Treasury bonds the interest would have been higher than 18 per cent,” the Minister said. Earlier this month, Sri Lanka said it was selling bonds to raise funds for infrastructure projects.

The Central Bank of Sri Lanka said it has selected J. P. Morgan, Barclays Capital and HSBC as Joint Lead Managers/Bookrunners/ Underwriters to the US$500 million international bond issue.

The bond issue will be carried out by the Central Bank on behalf of the Sri Lankan Government. This debut sovereign bond issue is also expected to serve as a benchmark for other corporate borrowers in Sri Lanka, which have the capability of raising money in international capital markets.

With the receiving of this US$ 500 million, it would stabilise the current rupee fluctuation, he said. The funds that will be mobilised through the bond are to be used for financing the infrastructure development programmes of the Government.

The three lead managers were selected after the Central Bank invited proposals from selected banks/investment houses on July 2. In response, 12 international banks and investment houses submitted their proposals and made presentations.

President Federation of Chamber of Commerce and Industry (FCCISL) Nawaz Rajabdeen said bonds are a must for a country like Sri Lanka to accelerate the infrastructure development of the country. “This is not being taken to fight the war,” he said.

He said that the fact that the bonds were internationally oversubscribed itself shows investor confidence for the country.

“I am sad to note that senior politicians in the Opposition are trying to take undue publicity from this,” he said.

Rajabdeen said that the success of the bond issue proves that the international community has not taken them seriously.

Chairman Board of Investment (BoI) Dhammika Perera said the success of the sovereign bonds is a clear indication of the investor confidence for Sri Lanka. “The country needs these bonds to take their accelerated development process forward” he said.

Minister of Investment Promotion Navin Dissanayake said the positive response for the Government’s bond offer shows that Fund managers and foreign investors have confidence in the Sri Lankan economy.

He said that when there was adverse publicity towards the bond offer the country was able to gain a good response.


Gamin Gamata - Presidential Community & Welfare Service
Ceylinco Banyan Villas

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