Sri Lanka may retire bunched up bonds around 2021

ECONOMYNEXT – Sri Lanka may retire dollar bonds that are ‘bunched up’ and maturing around 2021 with dollar inflows and sovereign offerings in 2017, Central Bank Governor Indrajit Coomaraswamy said.

In 2017, there are no sovereign bonds maturing.

But on July 27, 2021, there is a billion dollar bond maturing. Another $500 million bond is due on January 2022, and on July 25, another billion dollar bond falls due. In the 13 months to July 22, there is about a $2.5 billion of bonds maturing.

Sri Lanka would like to go to markets in 2017 and use the funds to retire a bond that is ‘bunched up’ around 2021, and push the maturity further into the future, to improve debt management, Coomaraswamy said.

In 2017, Sri Lanka is also expecting to sell the Hambantota Harbour to the Chinese for around a $1 billion. As it is happens, there will be even more room to mature.

Sri Lanka has shown that it can raise about $1.5 billion a year at reasonable rates. A decision to buy back a particular bond and cancel it may make it more valuable and push up its price (lowering the yield), analysts say.

Sri Lanka’s budget deficit is also expected to improve in the next three years, if administration can keep the lid on spending. (Colombo/Nov08/2016 – CORRECTED – But on July 27, 2021, there is a billion dollar bond maturing. Another $500 million bond is due on January 2022, and on July 25, another billion dollar bond falls due. )

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