Govt. to raise up to $ 300 m via Domestic Dollar Bonds

• $ 100 m offer can be upsized threefold; minimum ticket cut to $ 10,000 from $ 1 m
• Second post-crisis DDB issue opened to diaspora, individuals and businesses
• Treasury Secretary says debt targets met; shifting to longer-term, rupee-denominated borrowing
• Bids open 19-23 Oct. for one-, two- and three-year Bonds at fixed rates set by auction

The Government will raise up to $ 300 million through an issue of Domestic Dollar Bonds (DDBs), Treasury Secretary Dr. Harshana Suriyapperuma said yesterday. It is opening the issue to diaspora and individual investors for the first time since the debt crisis.

Speaking at the Sri Lanka Economic and Investment Summit, Dr. Suriyapperuma said the $ 100 million offer could be topped up by another $ 200 million in two tranches.

This is the second US dollar-denominated Bond offer since the debt crisis. In 2025, the Government raised about $ 50 million through a DDB issue with a $ 1 million ticket size, which was aimed mainly at banks. This time, the minimum investment has been cut to $ 10,000 to draw in a much wider pool of investors.

“Last time, the ticket size was $ 1 million because it was open only to commercial banks. This time, it is open to the diaspora, individuals and businesses, Government or otherwise, who have access to foreign earnings and savings,” Dr. Suriyapperuma said.

He described the issue as a test of the local market. He added that it was meant to show the direction the Government is taking to maintain financial stability alongside debt sustainability.

“The targets are very clearly laid out, and we have reached the required levels as of now,” he said.

Dr. Suriyapperuma said the Government’s debt strategy rests on two approaches. The first is to cut interest costs by retiring debt as early as possible. The second is to replace short-term borrowing with long-term borrowing to bring predictability, consistency and stability. The Government is also cutting its exposure to foreign currency debt in favour of rupee debt, a strategy he said had worked well so far.

“We are looking at all options. Not a single option is set aside,” he said. He added that the Treasury would choose whichever route best serves the country’s interest, whether that is the local market or a more open market for investors.

According to the offer document, the Public Debt Management Office (PDMO) of the Finance, Planning and Economic Development Ministry is offering Bonds with maturities of one, two and three years. The fixed interest rates for all three maturities will be set through competitive bidding.

Subscriptions open at 9 a.m. on 19 October, 2026 and close at noon on 23 October, 2026. Settlement is on 30 October, 2026. Larger applications must be in multiples of $ 10,000.

Interest will be paid twice a year, on 30 April and 30 October. It will be calculated on the actual number of days in each period over a 360-day year. Principal and interest will be paid in dollars and can be taken out of the country in full.

The issue is open to foreign citizens and Sri Lankans living abroad investing through Inward Investment Accounts, and to holders of personal and business foreign currency accounts and offshore banking accounts. 

Companies, partnerships and funds established overseas can also invest, as can licensed commercial banks appointed as authorised dealers, and licensed specialised banks and finance companies permitted to accept foreign currency deposits. Because of US regulatory requirements, the Bonds will not be offered, sold or transferred to US persons or within the US.

Applications must be submitted through 15 designated agents, which are selected licensed commercial banks and primary dealers. Bank of Ceylon is the paying agent. The Bonds are being issued under the Public Debt Management Act No. 33 of 2024, and the Central Bank has granted the required permission under the Foreign Exchange Act No. 12 of 2017.