SLDBs US $ 150 m issue oversubscribed by 1.5 times
The Central Bank's issue of Sri Lanka Development Bonds (SLDBs) US
$150 million was oversubscribed by 1.5 times with the total bid received
amounting to USD 229.02 million. The Central Bank, on behalf of the
government, offered to issue Sri Lanka Development Bonds (SLDBs) of US $
150 million in three year tenor to eligible investors for subscription
at a rate of US $ 6 month LIBOR plus a margin to be determined through
The offer was opened from June 18 to 25 for bidding with the
settlement on July 2. Both foreign and local commercial banks subscribed
bids at the auction. The offer was oversubscribed by 1.5 times with
total bid received amounting to US $ 229.02 million.
In view of the high demand by the investors, the government decided
to accept US $ 229.02 million in 3 year maturity at the market
determined rates of US $ 6 month LIBOR + 410 bps (weighted average
margin). Today, the US $ 6 month LIBOR rate is 0.73 percent.
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.
The SLDBs 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.
Development Bond is issued by a government to raise financing for
funding one or more specific projects or development work in geographic
area. The Central Bank of Sri Lanka on behalf of the Sri Lankan
government also sold sovereign bonds worth up to US $ 1 billion, which
is most likely to be utilized for the redemption of the country’s
first-ever sovereign bond in 2007, which matures in October this year.