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Join date : 2014-02-23
The Government has raised $ 187 million via the issuance of three year tenure Sri Lanka Development Bonds (SLDBs) at competitive rates and three times oversubscription of the original offered amount.
The Central Bank on behalf of the Government offered to issue SLDBs of $ 60 million in three year tenure to eligible investors for subscription at a rate of US dollar six month LIBOR plus a margin to be determined through competitive bidding.
The offer was opened from 3-10 March, 2014 for bidding with the settlement on 17 March, 2014. Foreign and local commercial banks operating in Sri Lanka subscribed at the auction.
The Central Bank said the offer was oversubscribed by 3.1 times with total bids received amounting to $ 187 million.
“Considering the high demand for SLDBs and providing an opportunity for investors to invest their funds for a longer period, it was decided to accept the entirety of $ 187 million in three year maturity at the market determined rate of USD six month LIBOR plus a weighted average margin of 400 bps,” the Central Bank said. The US Dollar six month LIBOR rate as of 10 March, 2014 is quoted at 0.3318%.
Previous issues in 2013 were at slightly higher cost.
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.