The Central Bank of Sri Lanka, on behalf of the Government of Sri Lanka, offered to issue Sri Lanka Development Bonds (SLDBs) of US $ 60 million in 3-year tenor to eligible investors for subscription at a rate of US $ 6 month LIBOR plus a margin to be determined through competitive bidding.
The offer was opened from 10th – 17th of September for bidding with settlement due on the 24th of September 2012.
“In view of the high demand by the investors, the Government decided to accept US $ 121.05 million in 3 year maturity at the market determined rates of US $ 6 month LIBOR + 400 bps (weighted average margin),” a statement from the Central Bank of Sri Lanka read.
“Today, the US $ 6 month LIBOR rate is 0.67 per cent. With this transaction, the Government succeeded in achieving a lower margin compared to the 410 bps of the previous three-year SLDB issue in June 2012,” it added.
The statement from the CBSL went on to state that both foreign and local commercial banks operating in Sri Lanka had subscribed bids at the auction.
SLDB’s are transferable by endorsement, delivery and registration with the Superintendent of Public Debt of the Central Bank of Sri Lanka.
Eligible investors may purchase SLDBs in the secondary market through Designated Agents appointed by the Central Bank of Sri Lanka.
The SLDB issue was executed in terms of Section 2 (a) and 2 (c) of the Foreign Loans Act No. 29 of 1957 as amended.