Sri Lanka central bank says US$988mn raised at average yield of 5.261-pct

COLOMBO (EconomyNext) – The Central Bank of Sri Lanka said it had raised almost a billion US dollars through an international sovereign bonds and Sri Lanka Development Bonds (SLDBs) at a weighted average cost of 5.261 percent a year.

It launched and priced a 650 million dollar 10-year International Sovereign Bond at a yield of 6.125 percent per annum on Thursday, 28th May 2015.

“On the same day, the Central Bank issued 329 million dollars in SLDBs of 1 year 1 month maturity at a Weighted Average Margin (WAM) of 316.69 bps and 9 million dollars in SLDBs of 2 years 11 months maturity at a WAM of 353.89 bps, over 6 month London Interbank Offered Rate.

“Accordingly, a total of 988 million dollars was raised via International Sovereign Bonds and SLDBs at a weighted average cost of 5.261 percent per annum,” it said in a statement.

However analysts say the two bonds and their yeilds cannot be directly compared and averaged. SLDB’s have a floating coupon and is subject to interest rate risk (rates can change up when the Libor rate changes) and the shorter tenor floating rate notes have re-investment risk (rates can change when they come up for maturity)  while the longer tenor bonds have higher maturity risk.

 

Latest Comments

Your email address will not be published. Required fields are marked *