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Thursday April 18th, 2024

Sri Lanka rupee bond yields fall after rate cut, sovereign yields up

ECONOMYNEXT – Sri Lanka’s rupee bond yields fell at open after a rate cut, sovereign bond yields were up, and there were no two way quotes for the rupee in the spot market after closing sharply down Friday in forward markets, dealers said.

Sri Lanka’s central bank cut rates Friday by 25 basis points as the rupee slid to record lows.

The rupee had traded around 195.50 to 196.00 to the US dollar levels in the one week forward market, dealers said. The rupee had been quoted at even lower levels in one year forwards, implying an even lower closing Friday dealers said.

Yields on dollar denominated sovereign bonds picked up after the rate cut, losing some of the advances made after Treasury secretary S R Attygalle boosted investor confidence by saying the government had no intention of defaulting on sovereign bonds.

In the secondary government securities market, yields came down in moderate trading, dealers said.
Dealers also said that the 2022, 2023 and 2024 maturities were more liquid.

A bond maturing on 15.12.2021 was not quoted.

A 2-year bond maturing on 01.10.2022 was quoted at 8.55/65 percent down from 8.85/90 percent.

A bond maturing on 01.09.2023 was quoted at 9.00/10 percent, down from 9.15/25.

A bond maturing on 15.09.2024 was quoted at 9.12/20, down from 9.30/35 percent.

A bond maturing on 15.10.2027 was quoted at 9.35/45 percent down from 9.45/65 percent.

A bond maturing on 15.05.2030 was not quoted.

A bond maturing on 15.09.2034 was not quoted. It closed at 10.00/40 percent in its last close.
(Colombo/ Apr06/2020)

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Sri Lanka’s discussions with bondholders constructive: State finance minister

ECONOMYNEXT – Sri Lankan authorities continue to engage all debt restructuring negotiations in good faith, within principles of equitable treatment among creditors, and with maximum transparency within the norms of such negotiations, State Minister of Finance, Shehan Semasinghe has said.

“It is standard practice, when a representative group of bondholders is formed, to entertain confidential discussions with such group and its appointed advisors. In the case of Sri Lanka, the Ad Hoc Group of Bondholders represents holders controlling more than 50% of the bonds, which make them a privileged interlocutor for Sri Lanka,” Semasinghe said on X (twitter).

“It is well understood that given the price sensitive nature of the negotiations, and according to market regulations, discussions with the Group and its advisors are to be conducted under non-disclosure agreements. This evidently restricts the ability of the Government to unilaterally report about the substance of the discussions.

“The cleansing statement, which was issued on the 16th of April, at the conclusion of this first round of confidential discussions with members of the Group, aims at informing the Sri Lankan people, market participants and other stakeholders to this debt restructuring exercise, about the progress in negotiations. It provides the highest possible level of transparency within the internationally accepted practices in such circumstances.

“As informed in this statement, confidential discussions held in recent weeks with bondholders’ representatives proved constructive, building on the restructuring proposals presented by both parties. During the talks both sides successfully bridged a number of technical issues enabling important progress to be made. Sri Lanka articulated key remaining concerns that need to be addressed in a satisfactory manner.

“The next steps would entail further consultation with the IMF staff regarding assessments of the compatibility of the latest proposals with program parameters. Following these consultations, we hope to continue discussions with the bondholders with a view to reaching common ground ahead of the IMF board consideration of the second review of Sri Lanka’s EFF program.”

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Sri Lanka rupee weakens at 301.00/302.05 to the US dollar

ECONOMYNEXT – Sri Lanka’s rupee closed at 301.00/302.05 to the US dollar in the spot forex market on Tuesday, from 299.00/10 on Tuesday, dealers said. Bond yields were broadly steady.

A bond maturing on 15.12.2026 closed stable at 11.30/35 percent.

A bond maturing on 15.09.2027 closed at 11.90/12.05 percent up from 11.95/12.00 percent.

A bond maturing on 15.12.2028 closed at 12.10/20 percent down from 12.10/15 percent.

A bond maturing on 15.07.2029 closed at 12.25/40 percent.

A bond maturing on 15.03.2031 closed at 12.30/50 percent. (Colombo/Apr17/2024)

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Sri Lanka Treasury Bill yields down across maturities

ECONOMYNEXT – Sri Lanka’s Treasuries yields were down across maturities at Wednesday’s auction with the 3-month yield moving down 7 basis points to 10.03 percent, data from the state debt office showed.

The debt office sold all 30 billion rupees of 3-month bills offered.

The 6-month yield fell 5 basis points to 10.22 percent, with 25 billion rupees of bills offered and 29.98 billion rupees sold.

The 12-month yield dropped 4 basis points to 10.23 percent with 18.01 billion rupees of bills sold after offering 23 billion rupees. (Colombo/Apr17/2024)

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