Fresh development bond issue to raise $ 60 m

Tuesday, 11 September 2012 01:29 - - {{hitsCtrl.values.hits}}

By Maheshi Perera

The Central Bank has launched the fourth issue of Sri Lanka Development Bonds (SLDBs), aimed at raising $ 60 million by 24 September.

The fresh SLDB’s tenure is three years and will be offered at a rate of US Dollar six month LIBOR plus a margin to be determined through competitive bidding to be concluded by 17 September.

The Central Bank is calling for a minimum investment of $ 100,000 in multiples of $ 10,000 subjected to semi-annual interest payment.

The previous three-year tenure SLDB issue in June with $ 150 million offered was a success, prompting the Central Bank to raise $ 229 million. It was concluded with a market determined rate of US$ 6 month LIBOR of 0.73% + 410 bps (weighted average margin).

The US$ six-month global LIBOR rate for 7 September reports 0.69%, which is 0.04% less than the USD 6 month LIBOR rate in June 2012.

Via three issues the Government has raised $ 313 million via SLDBs and the latest issue will bring the total to $ 373 million if the Central Bank sticks to the offered amount.

According to the Central Bank data as of June 2012, the country’s foreign debt amounted to Rs. 2.79 trillion, whilst domestic debt was Rs. 3.15 trillion, bringing the total to Rs. 5.94 trillion, up 15% from end 2011.

The SLDBs are transferable by endorsement, delivery and registration with the Superintendent of Public Debt of the Central Bank. The SLDBs could be purchased by qualifying investors in the secondary market through all designated agents appointed by the Central Bank.