The government has accepted US$ 92 million after a US$ 100 million Sri Lanka Development Bond issue was 1.34 times oversubscribed with total bids from local and foreign commercial banks amounting to US$ 134 million, the Public Debt Department of the Central Bank said.The government has accepted US$ 55 million on development bonds with a three year maturity period at about 4.35 percent. US$ 37 million development bonds with a two-year maturity period were accepted at about 4.20 percent.
These bonds were priced at the six-month London Interbank Offered Rate (LIBOR) which was 0.40 percent as at yesterday. The three-year bond was priced at a premium of 3.95 percent (395 basis points) while the premium on the two-year bond was priced at 3.80 percent (380 basis points). The premiums were determined through competitive bidding.
The premium reflects the risk factor the government’s ability to repay the investments. The premiums on the latest development bond issue are lower than the premium for the three year bond issue in September 2009 which was 4.25 percent (425 basis points) and the 4.50 percent (450 basis points) premium for the two month bond issue in August 2009, the Public Debt Office pointed out.
"This SLDB issue is within the borrowing limit approved under the Vote on Account by Parliament for 2010 and the funds mobilised through the new bond issuance is to be used for development activities carried out by the government," the Public Debt Department of Central Bank said.
source - www.island.lk
No comments:
Post a Comment