Big demand for SL Development Bonds

Saturday, 16 February 2013 00:00 - - {{hitsCtrl.values.hits}}

Sri Lanka’s economic story appears to be attractive, judging by the big appetite for the country’s latest issue of Development Bonds.

The Central Bank said yesterday the US$ 60 million issue of three-year Sri Lanka Development Bonds (SLDBs) had attracted $ 152.12 million worth of bids reflecting a two-and-a-half times’ oversubscription.

“In view of the high demand by the investors, the Government decided to accept $ 152.12 million in three-year maturity at the market determined rate of US Dollar 6 month LIBOR + 400 bps (weighted average margin),” Central Bank said.

The US Dollar 6 month LIBOR rate yesterday was 0.4649%.

“With this transaction, the Government succeeded in maintaining a lower margin as the previous three-year SLDB issue in September 2012,” Central Bank added.

The SLDBs were offered to eligible investors for subscription at a rate of US Dollar 6 month LIBOR plus a margin to be determined through competitive bidding.

The offer was opened from 8-15 February 2013 for bidding with the settlement on 22 February 2013. Foreign and local commercial banks operating in Sri Lanka subscribed at the auction.

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.

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