Dollar bonds to raise US$ 185 m

The Central Bank of Sri Lanka, on behalf of the Government of Sri Lanka, offered to issue Sri Lanka Development Bonds (SLDBs) of US Dollars 185 million to eligible investors for subscription at a rate of US Dollar six month LIBOR plus a margin to be determined through competitive bidding.

The offer was opened from March 1 to 8, 2011 for bidding with the settlement on March 16, 2011. Both foreign and local commercial banks bid at the auction with the total bids received amounting to US Dollars 204.25 million.

Of the bids received, the Government decided to accept US Dollars 99 million in three year SLDBs and US Dollars 93 million in four year SLDBs at the market determined rate of US Dollar 6 month LIBOR + 375 bps (weighted average margin) and 6 month LIBOR + 385 bps (weighted average margin), respectively.

Today, the US Dollar six month LIBOR rate is 0.46 per cent. 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, and the funds mobilized through the new SLDB issuance are to be used to settle maturing SLDBs of US Dollars 185 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 can purchase SLDBs in the secondary market through designated agents appointed by the Central Bank of Sri Lanka