Rs. 140 b Bond auction delivers bullish outcome

• Secondary Bond market rallies as market liquidity hits new high

By Wealth Trust Securities

The Bond auctions conducted yesterday delivered a decisively positive outcome, with the Public Debt Management Office raising the entire Rs. 140 billion on offer across three maturities. 

This reflected the bullish momentum in the secondary Bond market fuelled by elevated liquidity levels, compressed money market rates and mirroring the decline in yields at the T-Bill auction held the previous day.

For context, the money market net liquidity surplus remained elevated at Rs. 341.02 billion yesterday, higher than the previous day’s level of Rs. 322.02 billion which was a 22-year high. Meanwhile the weighted average rates on overnight call money and Repo were recorded at 7.69% and 7.71% respectively.

At the Bond auction weighted average rates across the board were seen coming below or in-line with market levels. The bids received to accepted amount ratio stood at 2.79 times. Maturity-wise the results were as follows:

The shorter tenor 01.03.30 maturity was issued at a weighted average yield of 9.50%, and the entire maturity-wise offered amount was fully raised at the first phase of competitive bidding. This was below market expectations, as the maturity was quoted at a two-way price of 9.52%/9.55% pre-auction.

The 15.06.34 maturity was also fully subscribed at the first phase, and was issued at the weighted average yield of 10.70%. This was also below market expectations as the maturity was seen quoted at the rate of 10.70%/10.75% prior to the auction.

The longer tenor 01.07.37 maturity was also fully subscribed and issued at a weighted average yield of 10.88% which was a narrow term premium over the nearest actively quoted 15.06.35 maturity which was quoted at the rate of 10.77%/10.80% just prior to the auction.

An issuance window for the across all three tenors is now open until 3.00 pm of 13.02.2026 at the Weighted Average Yield Rates (WAYR) determined for the said ISIN at the auction, up to 10% of the respective amount offered (the table gives details of the auction).

The secondary Bond market yesterday rallied and saw rates decline sharply on the back of aggressive buying interest. Both before and after the Treasury Bond auction, yields were seen trending lower, with momentum picking up further following the announcement of the results. The activity and transaction volumes remained robust, supported by several block trades.

Accordingly, the 15.01.27 maturity traded at the rate of 8.20%. The 15.06.29, 15.09.29, 15.10.29 and 15.12.29 maturities traded lower at the rates of 9.35%, 9.42%-9.40%, 9.45%-9.40% and 9.45-9.42% respectively. The 01.03.30 maturity traded below the auction weighted average to touch a low of 9.48%. The 15.03.31 maturity traded down the range of 9.75%-9.70%. The 01.10.32 maturity traded down the range of 10.22% to a low of 10.12% and the 15.12.32 maturity traded down the range of 10.15%-10.13%. The 01.06.33 maturity traded down the range from an intraday high of 10.47% to a low of 10.35%. The 01.11.33 maturity traded at the rate of 10.40%. The 15.06.35 maturity traded down the range of 10.79%-10.70%.

The total secondary market Treasury Bond/Bill transacted volume for 25 February was Rs. 26.43 billion.

Forex market 

In the Forex market, the USD/LKR rate on spot contracts were seen closing the day at Rs.309.29/309.32 as against its previous day’s closing level of Rs. 309.33/309.36. 

The total USD/LKR traded volume for 25 February 2026 was $ 123.65 million. 

(References: Public Debt Management Office- Ministry of Finance, Central Bank of Sri Lanka, Bloomberg E-Bond trading platform, Money broking companies)