Sri Lanka to sell more short tenor dollar bonds
ECONOMYNEXT – Sri Lanka has called offers to sell 50 million US dollars of 15 month and two year dollar denominated bonds which will pay fixed or a floating interest rate, the state debt office said.
The securities styled Sri Lanka Development Bonds are targeted at the domestic markets, but can also be bought by foreigners.
This year, the debt office has sold over 500 million dollars of bonds which will mature next year.
Analysts say many Middle Eastern lenders are willing to advance money to commercial banks in Colombo on short tenors of around a year, who will in turn flip the funds to the state at a higher rate.
Though only 50 million in bids are called, it I the practice of the debt office to accept more if the bids are within the yield range. Bids will close on July 27, with settlement on August 03.
On July 13, the state sold 291 million dollars of 13-month bonds at 330 basis points above the 6-month London Interbank Offered Rate.
Sri Lanka is borrowing in domestic and international markets to finance a raft of election relating subsidies and salary hikes. (Colombo/August20/2015)