"This marks Sri Lanka’s ninth US dollar benchmark as well as the largest offering in the international bond market since 2007, Central Bank’s Deputy Governor Dr Nandalal Weerasinghe told the Island Financial Review yesterday.
He said with these funds the government will invest in major infrastructure projects in the country, especially roads, hospitals, schools and other important ventures.
Accordingly, the international bond issue with a 6.85 percent rate received US$ 3.3 billion from 290 accounts with the US investors taking 55 percent, European investors 29 percent and Asians 16 percent.
The allocation by investor type was 88 percent for fund managers, banks 9 percent and pension/insurance agencies 3 percent.
"The outcome of this bond issuance shows the continued investor confidence in Sri Lanka, despite the volatility in the international bond market, the Central Bank said.
The Finance Ministry will use the funds to help plug a gap in the budget, government sources said.The new government said it would not be able to limit the 2015 deficit to a targeted 4.4 percent of gross domestic product (GDP) due to heavy spending and weak revenue, Finance Minister Ravi Karunanayake said.
According to the Finance Minister, the budget deficit is likely to reach 6.5-6.8 percent of GDP.
The bond has been rated ‘BB-’, ‘B1’ and ‘B+’ by Fitch Ratings, Moody’s Investors Service and Standard and Poor’s, respectively.
Courtesy : http://www.island.lk/index.php?page_cat=article-details&page=article-details&code_title=134395