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.

Sri Lanka heading for a soverign bond issue

(August 02, 2009 Lanka Polity) Sri Lanka state is reportedly planning to sell sovereign bonds to raise funds possibly US $ 500 million soon, government sources say.

In 2007, Central Bank of Sri Lanka  sold $500 million of bonds due in October 2012, at a yield 397.2 basis points higher than U.S. Treasuries of similar maturity.

HSBC, JPMorgan Chase & Co. and Barclays Capital had arranged Sri Lanka’s debut overseas bond sale.  Investors placed orders for more than three times the amount of debt sold.

The government has already in touch with the HSBC and JPMorgan to arrange meetings with investors in the U.S., India, Hong Kong and Singapore to highlight prospects in the island nation after the end of its civil war.