8/12/2009

Sri Lanka to get more loans from international financial market at high interest rate

(August 12, 2009 - Lanka Polity) Sri Lanka is planning to issue $500 million of five-year dollar bonds, aiming for a coupon rate of around 7 percent.

This is the second such loan after Sri Lanka's debut five-year, $500 million sovereign dollar bond, which was oversubscribed 300 percent when it was issued in October 2007 with a coupon rate of 8.25 percent.

The government is in close contact with the HSBC and JP Morgan with regard to the loan subject. 

Central Bank Governor Ajith Nivard Cabraal recently said the central bank would decide by August whether to pursue a $500 million sovereign bond, a syndicated loan or extend existing bills and bonds open to foreign investors.

A a Sri Lanka central bank official said to Reuters on August 11 that it had accepted $190 million in bids for two-year Sri Lanka development bonds at auction. The bonds will are priced at six-month LIBOR plus 4.50 percent.

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