Less appetite for Lankan Development Bonds
For the first time bids fall short of
US$ 200 m Bonds on offer

Proving its crunch time for Sri Lanka’s efforts to tap global financial markets, the latest offering of Development Bonds has for the first time fallen short of being fully subscribed.
The Central Bank on behalf of the Government, offered to issue Sri Lanka Development Bonds (SLDBs) to eligible investor categories for subscription at a rate of US Dollar 6 month LIBOR plus a margin to be determined through competitive bidding.
The offer was opened on 2nd March 2009 with the settlement on 16th March 2009. The Bonds on offer amounted to US Dollar 200 million for a 2 year maturity period.
The offer was subscribed by both foreign and local commercial banks, with the total bids received amounting to US Dollar 196.25 million (98.1% of the sum offered).
Of such bids, the Government has decided to accept US Dollar 184.25 million of 2 year SLDBs at the market determined rate of US Dollar 6 month LIBOR + 5.40 per cent (weighted average margin). Today, the US Dollar 6 month LIBOR rate is 1.88 per cent.
The Bank said this SLDB issue is within the annual borrowing limit approved by Parliament for 2009.
The SLDBs are transferable by endorsement, delivery and registration with the Superintendent of the Public Debt of the Central Bank of Sri Lanka. Eligible investors may purchase SLDBs from Designated Agents appointed by the Central Bank of Sri Lanka in the secondary market.