Proposals to select $1 bln bond managers

Sri Lanka is analysing proposals forwarded by prospective lead managers for a $1 billion sovereign bond and will accept a tenure between 10 and 15 years depending on the price, the Central Bank said yesterday.

The island nation’s fourth eurobond since it started to tap the international capital market in 2007 will be used to retire expensive debt and fund infrastructure projects. Assistant Central Bank Governor C J P Siriwardena, who was one of the main architects in selling the previous three bonds, said the Central Bank had received a number of proposals after inviting 10 banks to be lead managers. “Now we are in the process of analysing these proposals,” Siriwardena told Reuters.

However, he declined to comment on the number of proposals the central bank had received or when the central bank would announce the lead managers.

“The tenure is not yet decided,” Siriwardena said. “We have indicated up to 15 years, but depending on a favourable price we will accept the tenure between 10 years and 15 years.”

The $50 billion economy sold its debut $500 million, 5-year eurobond in 2007, during the last phase of a three-decade war, with a yield of 8.25 percent followed by another similar dollar bond in 2009 at 7.40 percent.

Last year, Sri Lanka extended its yield curve by selling a $1 billion, 10-year eurobond , which was priced with a yield of 6.25 percent. The central bank expects a better yield than the last year’s $1 billion, 10-year bond, though the bank hoped to extend the yield curve this year, Siriwardena said.

Reuters