Maturing two year SLDBs re-issued

With a three year maturity at a yield of six month LIBOR + 425 bps :

The Central Bank of Sri Lanka, on behalf of the Government, offered to issue Sri Lanka Development Bonds (SLDBs) to eligible investor categories for subscription at a rate of US $ six month LIBOR plus a margin to be determined through competitive bidding.

The offer was opened on September 9 with the settlement on September 22. The offer was oversubscribed with total bids received (US $ 63 million) amounting to 1.3 times the offer by both foreign and local commercial banks.

Of the bids received, the Government decided to accept US $ 41 million at the market determined rate of US $ six month LIBOR + 425 bps (weighted average margin).

Today, the US $ six month LIBOR rate is 0.6775 percent. The margins of past three auctions held during this year with a two year maturity period were 540 bps, 497 bps, and 450 bps respectively for March, June, and August 2009 SLDB issues.

This SLDB issue is within the annual borrowing limit approved by Parliament for 2009 and the funds mobilized through the new bond issuance are to be used to settle maturing two year SLDBs of US $ 35 million.

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