Home / TOP STORY/ CB calls for managers to raise $ 2 b in bonds

CB calls for managers to raise $ 2 b in bonds

Comments / {{hitsCtrl.values.hits}} Views / Tuesday, 22 January 2019 01:01



  • CB issues request on proposals from investment banks 
  • Intends to issue sovereign bonds in dollars, euro, yen and renminbi 
  • $ 2 b to be raised in single or multiple tranches for five years or longer 
  • Part of CB effort to raise over $ 5 b for debt repayments and reserve strengthening in 1Q 
  • SL has to repay $ 5.9 b in 2019, $ 2.6 b in 1Q for debt servicing 


The Central Bank yesterday issued a request on proposals from investment banks to sell up to $ 2 billion in international sovereign bonds as the Government readies to repay $ 5.9 billion in debt this year.

The notice posted on the Central Bank website said as per the approved International Sovereign Bond program for 2019, the Government intends to issue Sovereign Bonds in dollars, yen, renminbi and euro. 

“The dollar denominated bonds and/or currencies referred above denominated bonds for benchmark size issuances up to equivalent of $ 2,000 million in aggregate will be exercisable in single or multiple tranches with a competitive fixed coupon and medium to long-term maturities, preferably of five years or longer,” the notice said. 

Accordingly, the Central Bank, on behalf of GOSL, invites proposals from banks and investment houses for consideration to be appointed as Lead Managers/Book Runners on above issuances, it added. 

Cabinet gave approval earlier this month for the Central Bank to raise $ 2 billion for debt repayment. The rise in the amount comes after Parliament increased the borrowing ceiling for liability management on 26 October 2018, making it possible for the Government to borrow up to Rs. 310 billion. 

The Central Bank has been scrambling to gather sufficient funds to repay over $ 1 billion in loans that were due in the first two weeks of January. 

Having had its plans derailed during the seven-week constitutional crisis, the Central Bank repaid the $ 1 billion in debt last Monday from its reserves, and has reached out to India and China to bolster reserves to acceptable levels by the end of January. The monetary authority used $ 650 million from the HambantotaPort venture and funds leftover from the $ 1 billion received from China Development Bank in October to assist in the $ 1 billion bond repayment. 

Last week, the Central Bank announced that it had also raised $ 400 million through a swap arrangement with the Reserve Bank of India (RBI) and was in talks to raise $ 1 billion more from swaps. They had also secured a $ 300 million loan from the State Bank of China, which would be increased to $ 1 billion. 

“We are very keen to get this money into our reserves by the end of the month so that the reserve number published gives sufficient confidence to markets,” Central Bank Governor Dr. Indrajit Coomaraswamy told a forum recently, outlining plans to raise over $ 5 billion by the end of March. Sri Lanka also has a further debt repayment of $ 500m in April. In the first quarter, Sri Lanka has to repay $ 2.6 billion in total, he said.  

“We want to try and get all these transactions done in the first quarter of this year. The job of Central Banks is to prepare for the worst and we learnt a lesson on 26 October 2018. We don’t know what political tsunami might come next, so we have to plan and get the money in as fast as possible.” 

State banks Bank of Ceylon, People’s Bank, and National Savings Bank are raising lines of credit on behalf of the Government. National Savings Bank is negotiating a $ 750 million line of credit, while People’s Bank is currently on a road show in the Middle East. The Central Bank expects Bank of Ceylon and People’s Bank to jointly raise $ 200 million to $ 300 million.

The bulk of the $ 2 billion to be raised will come from a $ 1 billion or $ 1.5 billion bond if market rates are favourable, the Governor has said. The Central Bank is also considering the possibility of issuing Panda and Samurai bonds to make up the rest. Rating agencies downgraded Sri Lanka’s sovereign rating in November 2018 during the political turmoil that was triggered after President Maithripala Sirisena sacked sitting Prime Minister Ranil Wickremesinghe and appointed Opposition Leader Mahinda Rajapaksa. Ratings agencies have estimated Sri Lanka will have to repay about $ 12 billion from 2019 to2022.   


Rupee slips on importer, bank dollar demand; stocks down

December inflation dips to 2.1%

Share This Article

Facebook Twitter


1. All comments will be moderated by the Daily FT Web Editor.

2. Comments that are abusive, obscene, incendiary, defamatory or irrelevant will not be published.

3. We may remove hyperlinks within comments.

4. Kindly use a genuine email ID and provide your name.

5. Spamming the comments section under different user names may result in being blacklisted.


Today's Columnists

Trendvertising: The new world of communication in a hashtag world

Tuesday, 20 August 2019

Rahul Bose, an Indian actor, caught a lot of attention for a video post that went viral, where he complained about the price of bananas during his stay at a five-star hotel in Mumbai. As he explained in his story – he went to the gym at his hotel w

Company Law intertwined with Income Tax – Understanding the nexus! Part II

Tuesday, 20 August 2019

A comparison and analysing the impact of corresponding provisions of Companies Act No. 7 of 2007 and Inland Revenue Act No. 24 of 2017 reveals invaluable insights corporate management must be aware of in day-to-day management activities as well as st

Will ‘10 February’ be repeated?

Tuesday, 20 August 2019

Whilst Sri Lanka is in election mode, the thought crossing every Sri Lankans mind is, ‘Will the 10 February 2018 elections behaviour be repeated?’ given the head-start that ‘Brand Gota’ has got. Whilst many are speculating who will be the fig

Shanta Devarajan: Economist who cannot get disconnected from his motherland

Monday, 19 August 2019

For me, Shanta Devarajan, formerly the Acting Chief Economist of the World Bank Group succeeding the Nobel Laureate Paul Romer and presently Professor at Georgetown University, USA, was a legend by himself. When I met him in early part of the new mil

Columnists More

Special Report