By Katrina Nicholas
Sept. 27 (Bloomberg) -- Sri Lanka hired banks to help it with a benchmark sale of 10-year dollar bonds, according to a person familiar with the matter.
The bonds may price to yield around the 6.5 percent area, the person said, without being more specific and asking not to be identified as details are private. The central bank unveiled plans to sell bonds in August.
The sale will be Sri Lanka’s biggest in dollars since October, when it sold $500 million of 7.4 percent notes due 2015, according to data compiled by Bloomberg. Those notes are trading at 108.5 cents on the dollar to yield 5.172 percent, from 107.75 on Sept. 24, according to BNP Paribas SA prices on Bloomberg.
Fitch Ratings raised Sri Lanka’s credit outlook to positive from stable on Sept. 21, citing improved government finances and a $2.5 billion International Monetary Fund loan. The central bank kept interest rates unchanged that same day, leaving the reverse repurchase rate at 9 percent after consumer prices in Colombo rose 5 percent in August from a year ago. That’s less than half the average rate of the five years through 2009.
The Sri Lankan rupee is at its highest against the dollar since December 2008. Standard Chartered Plc is forecasting a faster appreciation in the rupee this year if the government “initiates investment-friendly reforms.”
Bank of America Corp., HSBC Holdings Plc and Royal Bank of Scotland Group Plc will manage the dollar bond sale, and will be assisted by Bank of Ceylon, the person said. Fitch assigned the bonds a B+ rating today, its fourth-highest non-investment grade.
Benchmark typically means at least $500 million.
source - noir.bloomberg.com
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