Sri Lanka raises US$2.0bn from sovereign bonds

ECONOMYNEXT – Sri Lanka has raised 2.0 billion US dollars from 5 and 10 year sovereign bonds a report said in the second such sale in 2019.

Sri Lanka sold 500 million dollars of 5-year bonds for 6.35 percent and 1.5 billion US dollars of 10 year bonds for 7.55 percent, Bloomberg Newswires said.

The yield is about 460 basis points above US Treasuries for 5-years and 553 basis points for 10 – years, based on published rates for June 24.

Sri Lanka has timed the bonds to go after US Treasuries yields eased and the Fed has indicated a rate cut ahead, getting a lower absolute rate than a March bond sale.

The bond was launched with initial price guidance of 6.60 percent for 5 year bonds and 7.8 percent for 10 year bonds.

Sri Lanka has so far raised 4.4 billion US dollars of sovereign bonds in 2019. It had also repaid 1.5 billion US dollars of maturing sovereign bonds.

In March Sri Lanka sold one billion US dollars in 5-year bonds at 6.85 percent and 1.4 billion US dollars of 10-year bonds at 7.85 percent indicating a spread of about 441 basis points above US Treasuries for 5-years and 521 basis points for 10 years.

Sri Lanka is likely to go to markets for a third time in 2019, using a new debt management law to raise funds for maturing debt in 2020, which will be an election year. (Colombo/June25/2019).

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